Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — SCOTLAND

Home Loans Scheme

Mr. Gourlay: asked the Secretary of State for Scotland if he will make a statement on the progress of the home loans scheme for private house purchasers in Scotland.

The Under-Secretary of State for Scotland (Mr. Hugh D. Brown): The results so far of the special £7 million building societies' scheme for 1975–76 have been disappointing, but the scheme has paved the way for the current discussions between the local authorities and the building societies which I hope will lead to more successful arrangements in future.

Mr. Gourlay: Since the allocation of funds to the local authorities for the next financial year has not yet been made, will my hon. Friend seek to increase that allocation or, alternatively, bring pressure to bear on the building societies to make provision for those persons who require assistance and who are unable to get loans from the local authorities?

Mr. Brown: I hope to announce the allocation to the authorities for 1976–77 within the next week or so. I do not like the use of the word "pressure", but I accept that there is still an area for discussion between the building societies and the local authorities. They are proceeding at the moment to try to give cover by way of loans for property which seems to be attracting loans from neither source at the moment.

Mr. Welsh: Does the Minister accept that the scheme depends on not only the

availability of cash but suitably priced housing? What steps is he taking to encourage research into and progress with the starter homes concept in Scotland?

Mr. Brown: That is a much wider question. There is no cash problem in the sense that the money is available from local authorities and building societies at the moment. The trouble arises with property for which, for one reason or another, neither the building societies nor local authorities can provide funds. If any research is needed I am willing to consider how it should be undertaken.

Mr. Canavan: Are the ratepayers not justifiably outraged at having to bear the burden of cheap home loan schemes for officials, some of which now appear to have been illegally introduced without the approval of the Secretary of State? If that is so, would it not be fairer to try to recover money from these overpaid executives, some of whom not only operated the scheme but benefited from it, instead of letting these bandits go scot free with the ratepayers' money?

Mr. Brown: I shall not try to match my hon. Friend's exaggerated and outrageous language. I had enough of that on the Freshwater and Salmon Fisheries (Scotland) Bill. It has to be accepted that perhaps this is just one of the problems to which not enough attention was paid after the reorganisation of local government. We have accepted in the special circumstances that the authorities concerned acted in good faith, but my right hon. Friend will have heard the comments and will no doubt bear them in mind.

Mr. Canavan: This is worse than Clay Cross.

Mr. Teddy Taylor: Many people in Scotland feel that this situation was an abuse and misuse of local government funds. Will the Minister say precisely why it has taken since last August for the Government to act on this matter—action which we fully support?

Mr. Brown: There has been a misunderstanding and we have accepted that, but I would make clear that the authorities acted in good faith. The Conservatives must accept some responsibility for


what were freely negotiated arrangements implemented by the local authorities concerned.

Oral Answers to Questions — Devolution

Mr. Crawford: asked the Secretary of State for Scotland what further representations have been made to him by the Scottish Council (Development and Industry) on the subject of the Scottish Assembly.

The Under-Secretary of State for Scotland (Mr. Harry Ewing): I have now received the Council's formal submission recording its views on the White Paper of November 1975.

Mr. Crawford: Does not the Minister agree with the Scottish Council that the White Paper totally refuses to recognise that the economic unity of the United Kingdom is not inviolable? Does he not agree with the Scottish Council that the refusal to recognise that the Scottish economy is not necessarily the same as the English economy means that Scotland's prospects of economic rebirth are not very bright?

Mr. Ewing: It is strange that the hon. Member should call in aid the Scottish Council document. If the hon. Member cares to read it and not quote it out of context, he will see that the Scottish Council repeatedly rejects any proposal which will lead to the break-up of the United Kingdom—[Interruption.] There is no point in the hon. Member disagreeing. I challenge him to read that document. It specifically mentions the question of separation and the hon. Gentleman's policy of withdrawing 71 Scottish MPs from the House of Commons. In the penultimate paragraph the Council makes the point that it is totally in favour of the retention of the Secretary of State in the United Kingdom Cabinet and the presence of Scottish MPs in the House of Commons. The hon. Member should therefore not be so hypocritical as to call in aid the Scottish Council's evidence. It has produced a very good document with much of which I agree.

Dr. M. S. Miller: Has my hon. Friend had a chance to study the document produced by his colleagues in the Scottish Parliamentary Labour Group, which clearly indicates that, taking the White Paper as a basis for discussion, a series

of proposals has been produced making devolution for Scotland a meaningful consideration, far short of the separation which the Scottish National Party wishes, but in accord with what the majority of the people of Scotland want?

Mr. Ewing: Yes, I have had an opportunity to study the document produced by my colleagues in the Scottish Parliamentary Labour Group. The document proves to me that the Scottish Trades Union Congress, the Scottish Council of the Labour Party and the Scottish Parliamentary Labour Group are united in their views about the kind of devolution they want for Scotland. As my hon. Friend rightly said, there is a world of difference between the proposals contained in the three documents to which I have referred and the proposals put forward by the SNP, which would be a disaster for Scotland.

Mr. Sproat: Interesting as the views of the Scottish Council are, does the hon. Gentleman accept that the biggest change in Scotland since the debate in January has been that important bodies such as the Scottish CBI, chambers of commerce, universities, doctors, secondary school teachers and accountants have made it clear that, on consideration, they are now against a Scottish Assembly? Will he also use this opportunity to clarify the numbers in the Scottish devolution unit?

Mr. Ewing: Yes. I am grateful to the hon. Gentleman for giving me the opportunity to clarify an answer which I gave in the debate on the Consolidated Fund Bill. I have written to the hon. Gentleman. I apologise both to him and to his hon. Friend the Member for Eastbourne (Mr. Gow). I confirm that the figure of 55 which I gave includes the staff in the Scottish Office and is not the total figure in the Cabinet Office Constitution Unit.
I accept, as do all hon. Members, that there are differences of opinion about devolution. The CBI and the chambers of commerce represent one section with one opinion and the organisations to which I have referred represent another section with a different opinion. It is for the Government and the House to decide who may be right or wrong.

Mr. Rifkind: If the hon. Gentleman shares the view of the Scottish Council


about the desirability of retaining the office of Secretary of State for Scotland in the Cabinet, does he realise that it would not be tenable to put forward such a proposal if the Secretary of State were to be stripped not merely of the suggested powers but of the economic and manpower powers which the Government in the White Paper propose should be left with him?

Mr. Ewing: The Scottish Council (Development and Industry) in its document does not suggest that the powers contained in Section 7 of the Industry Act should be taken from the Secretary of State for Scotland. The Scottish Council welcomes the fact that the Secretary of State has Section 7 powers and is to have the Manpower Services Training Agency and all the other manpower functions which are to be devolved. The Scottish Council supports the view that the Secretary of State ought to have these functions. As a Government we take that view. It will mean that it is important to have the Secretary of State in the Cabinet.

Mr. Donald Stewart: Does the hon. Gentleman accept that there must be a world of difference between the latest Labour Party proposals for devolution and the Government's White Paper, since the package which the Secretary of State said was just about right has now been subjected to some very hurried cobbling and patching?

Mr. Ewing: Political differences and differences in policy emerge from time to time in all parties. My mind goes back to the 1966 election manifesto of the Scottish National Party. [Interruption.] Some hon. Gentlemen were not even in the SNP in 1966. The SNP at that time was saying that 36 seats would give it the right to set up a provisional Scottish Government. That is a direct quote. Now the SNP is saying that 36 seats would give it the right only to negotiate, obviously in the hope that negotiations would fail. I notice that SNP Members are becoming very Westminsterised.

Several Hon. Members: rose—

Mr. Speaker: Order. If we are to have long questions and answers, we shall not go beyond Question No. 8 today.

Mr. Tim Renton: asked the Secretary of State for Scotland whether he is making any attempt to sound out the views of Scots currently resident in England and Wales on devolution.

Mr. Harry Ewing: The White Paper on Devolution contains a general invitation to express views to the Government on the devolution proposals. A similar invitation was contained in the shortened version of the White Paper.

Mr. Renton: That answer has about as much savour as porridge without salt. Are there not more Scots resident in England and Wales than in Scotland? Should not the Government make a specific effort to try to take their views into account before going forward with their half-baked measures?

Mr. Ewing: I advise the hon. Gentleman that porridge is certainly good with salt, but it is even better with a spoonful of treacle in it in the morning. [HON. MEMBERS: "Shame."] We do not have the information which the hon. Gentleman suggests should be available about Scots living in England and whether they outnumber those living in Scotland. We recognise the importance of Scots where-ever they live throughout the world. The Scots are always willing to share their expertise with all other nations, including England.

Mr. Russell Johnston: It is a pity that the hon. Gentleman's use of treacle does not spill over into the form of his answer. Since a form of obtaining the views of Scottish people on devolution would be a referendum, which has been talked about, are the Government thinking of it seriously? If so, are they giving consideration to what would be done about Scots living outside Scotland?

Mr. Ewing: It is not part of the Government's policy to hold a referendum on devolution.

Mr. Alexander Wilson: Will my hon. Friend reject the treacly porridge political attempts of the SNP in this matter? Will he also sound out English people residing in Scotland and the national and multinational companies which are responsible for employment in Scotland on their views regarding devolution or separatism?

Mr. Ewing: I think that my hon. Friend will accept that there is no demand in Scotland for separation. Indeed, the Scottish Council (Development and Industry) document makes the valid point that 80 per cent. of industry in Scotland is either United Kingdom or international in origin.

Mr. Peter Morrison: Will the hon. Gentleman tell us why the Government will not take seriously the idea of a referendum on devolution?

Mr. Ewing: I did not say that we did not take it seriously. I said that it was not part of the Government's policy to have a referendum on devolution. That is different from saying that we disregard it altogether as not being a serious matter. It is a very serious matter.

Mrs. Bain: Does the Minister feel that the idea propounded by the hon. Member for mid-Sussex (Mr. Renton) is worth while when a conference on devolution, planned to be held in Harrogate on 11th March, had to be abandoned for lack of interest? If we are to have a referendum, will the hon. Gentleman ensure that the word "independence", not "separatism", appears on the referendum sheet?

Mr. Alexander Wilson: It is separatism the SNP talks about.

Mr. Ewing: The hon. Member for Perth and East Perthshire (Mr. Crawford) could easily have sent a copy of one of his many speeches to Harrogate. That would have served the purpose. The hon. Member for Mid-Sussex (Mr. Renton) has a serious point. Scots living in England will be desperately anxious to ensure that Scotland does not separate, because a separate Scotland would have to tell Scots who wanted to come home that they could not do so, because a Scottish independent Government simply could not allow it.

Mr. Heffer: Is my hon. Friend aware that many of us will be delighted to hear that the Government take the suggestion of a referendum seriously and that the possibility is not ruled out? Therefore, will he convey to his right hon. Friends in the Cabinet the fact that the demand for a referendum is growing in all parts of the country and that we should be grateful if they would further consider it?

Mr. Ewing: I am well aware of my hon. Friend's views, which I respect. No doubt Cabinet Ministers will read his remarks. We take the issue of referenda seriously. I am only saying that they are not part of the Government's policy on devolution.

Mr. Fairgrieve: Returning to the Question on the Paper, would it not be more sensible to get the views on this issue of Englishmen living and working in Scotland rather than of Scotsmen living and working in England?

Mr. Ewing: That, too, is a relevant consideration. In my constituency there are many Englishmen, Welshmen, Irishmen and people of other nationalities—and some Scotsmen. I find no warmth for the idea of separation among those people. They certainly make their views clear about the policies of the SNP.

Mr. Reid: asked the Secretary of State for Scotland whether he is satisfied with progress being made towards the establishment of the Scottish Assembly.

Mr. Harry Ewing: Yes, Sir.

Mr. Reid: Is it not high time that the Minister stopped deceiving himself on this subject? If he looks at the balance of power in this House and considers the opposition to a meaningful Assembly Bill from Tynesiders, Merseysiders and centralisers of both the Tribunite Party and the Tory Party, he will have to concede that there are only two options open to the people of Scotland, because there is no chance of an Assembly Bill going through: those two options are independence and the status quo.

Mr. Ewing: The balance of power in the House shifts almost from day to day, depending upon the attendance record of SNP Members. It is the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) who should stop trying to deceive the people of Scotland into believing that the Bill will not pass through the House. I notice from his constant Press and television comments that he does not believe that such a Bill will pass through the House. I therefore assume that the hon. Gentleman will vote against the Bill. However, I take the hon. Gentleman's last point. I forecast that if the eventual choice for Scotland is to be between separation and any other


form of government, whether based on total unity or devolution, the vast majority will be against separation.

Mr. Alexander Wilson: Will my hon. Friend accept that we on the Government side of the House, in spite of recent television appearances and statements by an ex-member of the Labour Party, are not against devolution or any meaningful devolution? Will my hon. Friend now confirm that the SNP is the most dishonest party that has ever been represented in the House and that it wants not devolution or a Scottish Assembly but the complete disintegration of the United Kingdom?

Mr. Ewing: I think that I can agree fully with my hon. Friend's last point. However, I am sure that you, Mr. Speaker, would forbid me taking the two hours that it would take even to attempt to define what the SNP does or does not want.

Mr. Grimond: On what date does the Minister expect the first meeting of the Scottish Assembly to take place?

Mr. Ewing: I shall inform the right hon. Gentleman as soon as possible.

Mr. James Lamond: asked the Secretary of State for Scotland if he has now given consideration to all the representations he has received on the quesion of devolution.

Mr. Harry Ewing: Consideration is being given to those representations so far received; comments are still awaited from several of the bodies specifically invited to state their views.

Mr. Lamond: In view of my hon. Friend's confidence in the good sense of the Scottish people, would it not be wise for the Government to obtain the full-hearted consent of the Scottish people to the devolution proposals by holding a referendum on the matter? Does he believe that the appointment of a new Prime Minister might bring about some change in Government policy in this respect?

Mr. Ewing: Perhaps I should make clear to my hon. Friend, who represents Oldham, East, that I have confidence in the good sense of all the Scottish people from wherever they come, including my hon. Friend. I have already made the Government's position clear on the question

of a referendum and I have nothing further to add. As for what a new Prime Minister will do, sadly that is something upon which I cannot comment.

Mr. David Steel: Will the Minister, with all his authority, give an assurance that the new Prime Minister—and, presumably, the new Secretary of State for Scotland—will in no way slow down the galloping speed at which the Government are proceeding with this matter?

Mr. Ewing: There was a time in the middle of last week when it looked as though new leaders were the order of the day. We were wondering patiently what the new leader of the Liberal Party might say not only about devolution but about other areas of policy. So far as I have been able to ascertain and read in the Press, each of the candidates for the premiership is committed to devolution and has said that the policy and programme will proceed.

Mr. Sproat: But has the Minister noticed that, perhaps for the first time since I have been in this House, we have seen two Scottish Labour Members who represent English seats tabling Questions during Scottish Questions, which indicates the degree of opposition to the proposal for a Scottish Assembly? Will he accept that the only true thing that the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) has said on this subject is that his party seeks either total union or total separation, and that we should all stand behind one Britain and one Parliament?

Mr. Ewing: I do not accept that what the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) says is a correct interpretation of the feelings of the people of Scotland. Nor do I accept that because hon. Members representing English constituencies are tabling Questions on Scottish affairs they are opposed to devolution. I prefer to draw the conclusion that they are now interested in devolution. That is a very welcome sign indeed.

Oral Answers to Questions — Fishing Industry

Mr. MacCormick: asked the Secretary of State for Scotland what representations he has received from the Scottish fishing industry regarding the forthcoming negotiations on the common fisheries policy.

The Secretary of State for Scotland (Mr. William Ross): A resolution stating the views of the Scottish and English fishing industry on fishery limits and the reappraisal of the common fisheries policy was sent to Ministers on 18th February. Similar views have been expressed to me and my hon. Friends by the industry on a number of other occasions.

Mr. MacCormick: Does the Secretary of State accept that previous dealings with the European Economic Community have not protected the best interests of Scottish fishermen or the Scottish fishing industry? Can he guarantee that, whatever deal is done with the Common Market, on this occasion he will stick out for a 100-mile exclusive zone for British and, of course, Scottish fishermen?

Mr. Ross: I think that the hon. Gentleman may take it that the Government—this has been expressed before—will seek to get the best possible results from these negotiations to the advantage of our fishermen.

Mr. Younger: Does the right hon. Gentleman agree that the fishing industry in Scotland is united today as never before and is more deeply concerned about its future than ever before? Will he bear that in mind when negotiating the vital matter of the 100-mile limit for our fishermen?

Mr. Ross: Yes, Sir.

Oral Answers to Questions — Economic Affairs

Mr. Henderson: asked the Secretary of State for Scotland if he will make a statement on the prospects for the Scottish economy for the remainder of 1976.

Mr. William Ross: I have nothing to add to the reply which I gave to the hon. Member for Glasgow, Cathcart (Mr. Taylor) on 21st January.

Mr. Henderson: Is not that answer totally inappropriate on the day after the announcement of disastrous unemployment figures? Is not the right hon. Gentleman aware that the Fraser of Allander Institute forecasts that there will be no real recovery in output in the second half of 1976 and that unemployment will rise even higher?

Mr. Ross: I do not consider the unemployment figures of yesterday disastrous. [HON. MEMBERS: "Oh."] I con-

sider SNP Members themselves a disaster. If we had taken all their advice about slowing down oil development and other matters, unemployment would have been even higher. There is every evidence of a considerable easement in Scotland as well as in the United Kingdom as a whole and there is not the same reason as in the past for gloom about unemployment. Of course, if the SNP is committed to the posters that it puts up about things like unemployed school leavers, its members must welcome gloom, but there is no gloom in the figures presented yesterday.

Mr. Robert Hughes: Is it true that not a great deal of the money that the Government have made available in Scotland for retraining has been taken up? What steps can my right hon. Friend take to encourage local authorities and employers to use the money that the Government have made available for a very good purpose?

Mr. Ross: These matters are not my direct responsibility. We had a meeting in the House yesterday about training and job creation and we are putting forward proposals to get some steam behind the programme. The money is there and is being used, but we want schemes to come forward much more quickly. With the money at present being poured into industry, we hope to build up a pattern of prosperity which I am sure can be achieved with the co-operation of everyone in Scotland.

Mr. Buchanan-Smith: Can the right hon. Gentleman really be so complacent about the unemployment figures, which have risen in Scotland at the same time as they have been reduced in the rest of the United Kingdom? Can he not recall the fuss that he made when he was in opposition about the news of 90,000 unemployed in Scotland? Why are the figures rising in Scotland when Scotland has the boost of the oil industry? Is it perhaps because the Government's policies towards the oil industry have slowed down and are strangling the important development which Scotland should be having?

Mr. Ross: The hon. Member is talking nonsense. Over the last year, the Scottish economy and employment figures have stood up better than the figures for any other part of the United Kingdom—and that in the worst recession that we have


had since the 1930s. As I listen to hon. Members making these complaints, I remember how they voted against the Government's Chrysler solution and I imagine what kind of unemployment figures we should have if they had been in charge then. Have they forgotten that in March 1972 there were more unemployed in Scotland than there are today, when a Conservative Government were in office and when there was no world recession and no rise in oil prices? That was just the disastrous effect of Tory policies.

Oral Answers to Questions — Kirkintilloch

Mrs. Bain: asked the Secretary of State for Scotland if he will pay an official visit to Kirkintilloch.

The Minister of State, Scottish Office (Mr. Brace Millan): My right hon. Friend has no plans at present to do so.

Mrs. Bain: Will the right hon. Gentleman accept that that answer will be greeted with deep regret in Kirkintilloch? May I therefore express the deep concern of my constituents about vandalism there? Have the Government any plans to provide recreational facilities in such areas, which are totally without them at the moment? Does he intend to bring forward legislation to deter vandals effectively?

Mr. Millan: We have had questions about vandalism before. I have always said that if there were any legislation or other provisions which could solve the problem, the Government would be willing to look at them.

Mr. Selby: If the Minister yields to the hon. Lady's blandishments and goes to Kirkintilloch to examine the situation, will he stop off at Monklands to congratulate the electors there on showing such good sense as to reject the policies of the SNP?

Oral Answers to Questions — Passenger Transport Services

Mr. David Steel: asked the Secretary of State for Scotland if he will take steps to improve the co-ordination of the Scottish Transport Group, the traffic commissioners, and the local authorities in producing a cheap and efficient passenger transport service in Scotland.

Mr. Millan: A working party which I established recently has drawn up procedures to facilitate consultation between individual regional councils and the Scottish Bus Group about the provision of efficient local bus services, and these have been endorsed by the Convention of Scottish Local Authorities and the Bus Group. The traffic commissioners are an independent regulatory body and their in| elusion in these consultations would not be appropriate.

Mr. Steel: When do the Government intend to bring forward their legislation on rural transport? Will it include steps to remove the authority of the traffic commissioners which merely gums up the works?

Mr. Millan: We have promised first a transport review and a consultative document, which I hope will be published soon and which will deal with the whole of transport policy. As for rural transport, we announced certain proposals for: experiment last December. One of the experimental areas will be in Scotland. To carry the matter further, legislation would be required. I cannot put a date on it, but we want a more relaxed legislative position and then we can consider whether there are more flexible ways of dealing with some of the problems in rural areas. We are committed to that, although not to any precise way of achieving it.

Mr. Fairbairn: If the Minister is genuinely dedicated to a more flexible approach to rural transport, why did the Government vote against the Bill, of which I was a sponsor, to allow private operators to operate in rural areas in Scotland?

Mr. Millan: I am sorry to say, no doubt to the great disappointment of the hon. and learned Gentleman, that the fact that he had introduced such a Bill completely escaped my attention.

Dr. M. S. Miller: Since there seem to be so many insurmountable problems over the profitability of transport in Scotland by air, road and rail, would the Minister at least consider investigating the chances of rail transport being made free, so that the roads can be kept free of all kinds of pollution affecting them now?

Mr. Millan: I think that my hon. Friend will find that the consultative document will deal with the whole subject of finance very comprehensively. Looking at the problems as we have them at present, I cannot see that the idea of making services free would be very attractive. It would add very considerably to the taxation burden, both centrally and locally.

Mr. MacCormick: Is the Minister aware of the swingeing increases which have been imposed by the Scottish Transport Group's subsidiary, Island Ferry Services, and what do the Government intend to do about them?

Mr. Millan: Yes, I am aware of those increases. I do not consider them to be swingeing. Considering the additional costs that the group has had to bear on ferry services, I think that the increases are reasonable in all the circumstances. As the hon. Gentleman knows, the subsidies to the Scottish Transport Group for island ferry services were considerably increased by the Government only last year.

Miss Harvie Anderson: While most of the supplementary questions have dealt with the rural services, the Question itself does not specify rural services. Will the Minister accept that there is grave difficulty in the commuter areas, where expense and lack of frequency of service are resulting in an impossible position? Will he take that into account at the same time as considering the rural difficulties?

Mr. Millan: Again, the consultative document deals with the urban areas as well. I agree with the right hon. Lady that, while there are pressing and difficult problems in the rural areas, it ought not to be forgotten that very large numbers of people in the urban areas now face considerable transport problems.

Oral Answers to Questions — West Stirlingshire

Mr. Canavan: asked the Secretary of State for Scotland whether he will make an official visit to West Stirlingshire.

Mr. William Ross: I have at present no plans to do so.

Mr. Canavan: Will my right hon. Friend please try to arrange a visit to the naval depot at Bandeath in my constituency, where he will be able to see at

first hand an ideal site for an industrial estate right in the centre of Scotland, with excellent access by rail, road and sea? Will he support my proposal to the Scottish Development Agency for the development of this site as an industrial estate, in view of the impending closure of the depot and the need for jobs for the 160 Bandeath workers and others in my constituency?

Mr. Ross: Yes. I am aware of my hon. Friend's concern about the proposed phased closure in 1977–78 of the Bandeath establishment to which he has referred. He will appreciate that there is a Minister there today, an Under-Secretary of State for Defence. I am equally aware that my hon. Friend has also written to the SDA and is active on this matter, and I should be glad to support his efforts.

Mr. Younger: Will the Secretary of State remind his hon. Friend that it is the policy supported by his hon. Friend—unplanned defence cuts—that has resulted in the potential loss of many jobs in his constituency?

Mr. Ross: I did not get the feeling that my hon. Friend was exactly supporting the Public Expenditure White Paper last week.

Mr. Gordon Wilson: If the Secretary of State visits West Stirlingshire or any other constituency in Scotland, he will soon find that his failure to fight for Scotland in the Cabinet has led to complete—

Mr. Speaker: Order. The hon. Gentleman must put his point in the form of a question rather than a statement.

Mr. Wilson: May I invite the Secretary of State to go to West Stirlingshire, where he will find that there will be a complete revulsion on the part of many people against the Labour Party for its failure to cure Scotland's unemployment problems?

Mr. Ross: A week past Monday I was somewhere near Gretna and then I went across Scotland into Carlisle. On Friday I was at John o'Groats and around Caithness and Sutherland. I assure the hon. Gentleman that nothing that occurred there bears out the reactions that the hon. Gentleman has prophesied. I find very


considerable concern about the continuing mysteries of the SNP refusing to produce a paper on the consequences, economic and political, of its policies for complete separation.

Oral Answers to Questions — A9 (Bypasses)

Mr. Fairbairn: asked the Secretary of State for Scotland when the bypasses for the villages of Blackford, Auchterarder and Aberuthven will be begun; and when they will be completed.

Mr. Millan: On present plans and subject to the satisfactory completion of the statutory procedures and the availability of finance, I hope that the Blackford Bypass will start in 1977–78. Construction might take about two years. I cannot forecast when the other bypass schemes on the A9 are likely to start, although work is in hand on their preparation.

Mr. Fairbairn: Will the Minister appreciate that life in those three villages has now reached a state of absolute mechanical and barbaric hell for all those who live in them, that it is important that the bypasses for those three villages should be put in hand immediately, and that there is other expenditure that can be postponed in order to meet a serious human need?

Mr. Millan: I agree that these bypasses are needed. One of them, as I have said, will be started reasonably soon. For the others, it is a question of priorities and finance.

Oral Answers to Questions — Dundee-Aberdeen Road

Mr. Fairgrieve: asked the Secretary of State for Scotland when he expects the road between Dundee and Aberdeen, via Forfar and Stonehaven, to be dual carriageway throughout.

Mr. Millan: Dual carriageways are being constructed currently between Aberdeen and Stonehaven; the remainder is to be rebuilt mainly as a high standard single carriageway designed so that it can be converted to dual carriageways when the need for this is established.

Mr. Fairgrieve: I accept that reply. However, may I suggest to the Minister that there is one part of Scotland which, for the sake of the United Kingdom, now needs a dual carriageway, and that is the

road to the oil areas? It is this matter that should be attended to, rather than building more dual carriageways in areas in which, we are told, industry is declining.

Mr. Millan: I am sure that we are not building dual carriageways in Scotland where they are not needed. Again this is a question of priorities, and the capacity of the particular road concerned does not justify a dual carriageway at present.

Mr. Robert Hughes: Would it not be more desirable and economical if better use were made of the railway system to carry much of the goods now carried by road?

Mr. Millan: That also applies in a number of other parts of the country, but, unfortunately, even if there were a major transfer of traffic from road to rail the effect on the road system as a whole would be comparatively marginal.

Mr. Henderson: Bearing in mind the needs north of Aberdeen towards Peterhead and St. Fergus, where the system carries an enormous amount of traffic to and from the gas terminal and other developments, has the Minister any constructive proposals in terms of road or rail to relieve congestion?

Mr. Millan: I am bearing those matters in mind. If the hon. Gentleman will bear it in mind to table a Question on the subject, I shall answer it.

Mr. Doig: Is the route mentioned in the original Question the official main route approved by the Department for traffic between Dundee and Aberdeen?

Mr. Millan: Yes, as we have made clear on other occasions. We sent formal intimation of this state of affairs to the two regional councils concerned in January, but we have not had their formal reply.

Oral Answers to Questions — Ross and Cromarty

Mr. Gray: asked the Secretary of State for Scotland if he will pay an official visit to Ross and Cromarty.

Mr. William Ross: I have at present no plans to do so.

Mr. Gray: Is the Secretary of State aware that if he decides to visit Ross and Cromarty it will be made abundantly


clear to him that the answer given by his noble Friend the Minister of State, Scottish Office, in another place recently on the building of the Kessock Bridge has caused anger throughout the Highlands, since this bridge is vital to the future prosperity of Easter Ross? Will he investigate the methods used in the roads department of the SDD and the arrangements in respect of this contract? Will he make a statement to the House following what was said by the Minister of State in another place?

Mr. Ross: If the hon. Gentleman thinks this question so important, it surprises me that he did not place it on the Order Paper, in which case he would have been able to get a direct and detailed reply.

Mr. Gray: I have raised the matter before.

Mr. Ross: As the hon. Gentleman knows, this is a complex issue of the type of bridge and involves questions of cost and tendering arrangements. Those matters are now under active consideration. I assure him, on the basis of information we already have, that the answer given by my noble Friend the Minister of State in another place was correct.

Mr. Gray: Will the Secretary of State make a statement then?

Oral Answers to Questions — Local Authority Members (Allowances)

Sir John Gilmour: asked the Secretary of State for Scotland whether, in the light of present costs, he is satisfied with the current arrangements for the reimbursing of regional and district councillors, and the existing level of such payments; and whether he has any changes in mind.

Mr. Dempsey: asked the Secretary of State for Scotland, in view of the financial hardship suffered by members of local authorities whose earnings are in excess of the standard attendance allowance, if he will in such cases increase allowances legitimately to compensate those members; and if he will make a statement.

Mr. Millan: The present system of allowances for members of local authorities has been the subject of a comprehensive review but I am unable at present to add to the reply I gave my hon, Friend

the Member for West Lothian (Mr. Dalyell) on 13th October 1975.

Sir J. Gilmour: Does the Minister agree that, in view of the widespread concern as to the amount claimed by some councillors, there could be some merit in changing the present system, so that councillors are partly remunerated for salary and claim expenses only in relation to their attendance at meetings?

Mr. Millan: The question of salaries for councillors was discussed during the passage of the Local Government (Scotland) Bill. It is not the easiest of ways to obtain the right answer, but I have noted what the hon. Gentleman said.

Mr. Dempsey: Is my hon. Friend aware that there are some local authority representatives who earn much more than the £10 a day maximum attendance allowance and that as a result their household earnings are substantially reduced when they attend local authority meetings? Is this not unfair? Is there not some way in which the maximum figure of £10 could be supplemented to ensure that these people obtain adequate compensation to recompense them for what they have actually lost?

Mr. Millan: I agree that the real value of the £10 allowance has gone down since it was introduced. Although there are sometimes criticisms and allegations in the Press that not all councillors deserve allowances, there is also the other side of the story—namely, that many councillors, by losing wages or salary, find that the allowance has lost a considerable part of its value. The Government have been posed with considerable difficulties in reaching the right answer on these conflicting considerations.

Lord James Douglas-Hamilton: Will the Minister say whether he approves of councillors claiming attendance allowances for attending church services?

Mr. Millan: That raises the whole question of what is an official duty. The matter was considered during the review. But local authorities can take the initiative in defining what is an official duty.

Mr. Teddy Taylor: Does the Minister agree that there is general concern among councillors as well as the public that the


present system does not operate satisfactorily and that the remuneration paid to councillors does not necessarily reflect the amount of work they do or the responsibility which they carry? Before increasing the sum, does he think it right to carry out a review, in which councils could participate, to find better ways of handling these matters?

Mr. Millan: I agree that there is considerable concern. Before making any decisions, we shall consult the Convention of Scottish Local Authorities, and no doubt it will be able to put to us the kind of consideration that the hon. Gentleman has mentioned.

Oral Answers to Questions — Scottish Sports Council

Mr. Monro: asked the Secretary of State for Scotland if he will announce the grant to the Scottish Sports Council for 1976–77; and if he will make a statement.

The Under-Secretary of State for Scotland (Mr. Frank McElhone): The estimates for the Scottish Sports Council's grant in aid for 1976–77 are at present being considered with other departmental estimates before submission to Parliament. The Scottish Sports Council will be informed of its grant in aid as soon as possible.

Mr. Monro: Will the Minister say why he publicly criticised the Scottish Sports Council for giving grants in respect of golf courses which were freely available on a daily ticket basis to anybody, a facility widely enjoyed by young people? Was not the Sports Council set up to give grants where required?

Mr. McElhone: We should try to get a proper balance in this matter. I am not in favour of giving public money for private golf courses, especially when there are various organisations and groups looking after the interests of young people who do not have the facilities of golf clubs—club house, one-armed bandits and all the other fund-raising facilities.

Mrs. Bain: Would not the Minister agree that the development of sport in Scotland will be severely hit because, as a result of the education cut-backs, school facilities will not be open to outside groups?

Mr. McElhone: I am not aware that school facilities are not to be opened to outside groups If there is any evidence, I should be interested to receive it. I had a meeting yesterday with Dr. Docherty of the Manpower Services Commission. He has £12½ million of public money to spend and I have encouraged him to get together with the Scottish Sports Council to provide pitches, kick-about areas and, for the benefit of the hon. Member for Dumfries (Mr. Monro), even hockey and rugby pitches.

Oral Answers to Questions — Further Education Colleges (Salaries)

Mr. Donald Stewart: asked the Secretary of State for Scotland if he will now arrange for the immediate definition and payment of salaries to principals, depute principals, assistant principals and heads of departments in further education colleges and central institutions in Scotland, and for full implementation of the Houghton Report Stage 2.

Mr. McElhone: So far as further education colleges are concerned, I understand that the Scottish Teachers Salaries Committee agreed on 4th March to the final determination of salaries payable to heads of departments and higher grades of staff. As regards implementation of other aspects of "Houghton Stage 2", I understand a deputation met my right hon. Friend the Minister of State at the Department of Employment today and I will be discussing the outcome of the meeting with him. As regards staff in central institutions, I understand negotiations about "Houghton Stage 2" broke down on 17th March and I gather that they have gone to arbitration.

Mr. Stewart: I welcome such progress as has belatedly been made, but does the hon. Gentleman realise that there is great anger and frustration in the profession and among the people holding these posts because of the long time taken to bring the matter to a head? Is he aware that those concerned do not see any conflict with the wages policy and that the sooner this matter is cleared up, the better for the morale of the teaching profession in Scotland?

Mr. McElhone: I should make clear that there has been some misunderstanding among many people about stage two of the Houghton Report. Most of it has


been implemented. This part of the dispute concerns restructuring and certain promotion posts in further education. Since the Labour Government came to power, the salaries of school teachers and further education teachers have increased by an average of 60 per cent.

Mr. Buchanan-Smith: Does the hon. Gentleman recognise that there is a sense of unfairness among teachers of this class in further education colleges in Scotland? Will he tell the House what was the outcome of the meeting with his fellow Minister this morning?

Mr. McEIhone: I have yet to discuss with the Minister of State the outcome of this morning's discussions. If it is unsatisfactory, I shall discuss with him the possibility of this item being reintroduced at the next general round of pay talks.

Oral Answers to Questions — ADVOCATES-DEPUTE (SALARIES)

Mr. Fairbairn: asked the Lord Advocate what are the salaries of the home advocate-depute and advocates-depute; and what rises they have had and in what years since 1964.

The Lord Advocate (Mr. Ronald King Murray): There is no difference between the salary of the home advocate-depute and the other six advocates-depute. In 1964 the annual salary was £1,250, but in addition fees were paid for appeal court appearances. On 1st December 1965 the annual salary was increased to £1,750. On 1st April 1970 it was decided that Appeal Court fees should no longer be paid and that the salary should be increased to £3,500. On 1st January 1971 the salary was increased to £4,500; on 1st August 1974 to £7,500; and on 1st August 1975 to £9,000.

Mr. Fairbairn: I am obliged to the right hon. and learned Gentleman for that answer, which shows an inflationary spiral even greater than the Government have achieved in other matters. Does he feel that these salaries are justified in view of criticism of the law profession? If so, is the pay based on the real Scottish crime figures, or the bogus figures that the Scottish Office has been putting out over the last six years, although it knew the real figures?

The Lord Advocate: I disagree with both the hon. and learned Gentleman's comments. We have had justice on the

cheap in Scotland for many years and the services of advocates-depute have been greatly undervalued. There has been a considerable increase in the court time spent in prosecutions because of the increase in crime in the last few years. There has been a corresponding increase in the amount of office work of advocates depute.

Oral Answers to Questions — JUDICIAL REVIEW

Mr. Russell Johnston: asked the Lord Advocate what studies his Department has made of the process of judicial review in other countries.

The Lord Advocate: In considering the question of judicial review, officials of my Department have had regard to the process of judicial review in certain other countries, including a number of members of the Commonwealth and the Republic of Ireland.

Mr. Johnston: Is the right hon. and learned Gentleman aware that I am pleased to hear that such studies have been undertaken, but have they led him or his Department to conclude that any effective decentralisation of power within the United Kingdom requires some formal division of power which, in turn, will require some interpretation of vires? Would it not be far better and more appropriate for a judicial matter of this sort to be decided by a court rather than by a political Minister, as suggested in paragraphs 58 and 59 of the White Paper?

The Lord Advocate: It would be wrong to suggest that the studies of this aspect are complete. The hon. Gentleman will perhaps understand why I cannot give a categorical reply to his question at the moment.

Mr. Buchan: Surely the hon. Member for Inverness (Mr. Johnston) has got it wrong. Should not a distinction be drawn between the two types of ultra vires—that in relation to a Bill going through the Assembly, endorsed or otherwise by Parliament, and that in the judicial review afterwards in which the law can be challenged in the courts because, having passed the Assembly and the Parliament, it was thought to be ultra vires? I hope that we do not admit a judicial review and that what is passed


by the Assembly and Parliament becomes law.

The Lord Advocate: My hon. Friend draws an important distinction and tempts me, but I shall resist the temptation.

SEX DISCRIMINATION

Mr. Canavan: 36. Mr. Canavan asked the Lord Advocate how many prosecutions there have been in Scotland for contravention of the Sex Discrimination Act.

The Lord Advocate: This information is not collected centrally, but so far as I am aware there have been no prosecutions for offences under this Act.

Mr. Canavan: How can my right hon. and learned Friend explain the complete absence of prosecutions in view of the evidence of sex discrimination in Scotland, particularly in education, with relatively few female head teachers and the curriculum options for girls often restricted? Will he, in liaison with Scottish Office Ministers, see that these authorities are encouraged and even prosecuted, if necessary, in order to rid Scotland for ever of educational establishments which resemble male chauvinist pig sties?

The Lord Advocate: If my hon. Friend has evidence of sex discrimination in education, he has not put it before me. The Act rightly does not depend primarily on criminal sanctions.

Mr. Younger: Would the right hon. and learned Gentleman go further than that and agree that he should exercise the greatest reluctance in considering any prosecutions under the Act, since a number of prosecutions would merely make the law appear to be an ass whereas application of common sense would achieve the aims of the Act?

The Lord Advocate: Yes.

MARRIAGE (LAW REFORM)

Mr. Rifkind: 38. Mr. Rifkind asked the Lord Advocate whether he has received recommendations from the Scottish Law Commission with regard to reform of the law in respect of religious marriage in Scotland.

The Lord Advocate: No, Sir.

Mr. Rifkind: Would not the right hon. and learned Gentleman agree that it is becoming increasingly indefensible and absurd that members of the Moslem, Sikh and Hindu communities are unable to contract religious marriages in Scotland although they have a right to do so in the rest of the United Kingdom? Will he undertake to bring in the necessary small piece of legislation to remove this anomaly, in the interests of good community relations?

The Lord Advocate: Matters of this kind are not solely at my discretion. The hon. Gentleman asks whether I have received recommendations from the Scottish Law Commission. He knows that the matter was considered by the Kilbrandon Committee, whose Report of 1969 still stands. I agree it would be indefensible to attempt to justify the statutory basis of some religious marriages and not others, but this subject must be looked at in relation to the general legislative programme.

Mr. Fairbairn: In considering legislation on religious marriages in Scotland, since we are now considering a measure dealing with the dissolution of marriages in Scotland, would the right hon. and learned Gentleman remove the petty, bureaucratic and out-dated procedures in regard to the arrangements for the contracting of a marriage? Would he also, instead of trying to bring the law of Scotland into line with that of England, return to the law of Scotland and recognise that where a union is regular, it can be solemnised as a common law marriage?

The Lord Advocate: The hon. and learned Gentleman may have heard of the doctrine of approbate and reprobate. I was not sure whether he was approbating or reprobating marriage in his question.

EUROPEAN COMMUNITY (MEETINGS OF COUNCIL OF MINISTERS)

The Minister of State for Foreign and Commonwealth Affairs (Mr. Roy Hattersley): With your permission, Mr. Speaker, I will make a statement about business to be taken in the Council of Ministers of the European Community


during April. The monthly forecast for April was deposited yesterday.
The Heads of Government of the member States will meet in Luxembourg on 1st and 2nd April. There is no formal agenda for these meetings, but on this occasion the Tindemans Report on European union, direct elections to the European Assembly and unemployment in the Community are among the subjects likely to be discussed.
At present, five meetings of the Council of Ministers are proposed for April. Foreign and Finance Ministers will hold a joint meeting on 5th April; Foreign Ministers will meet on 6th April; Agriculture Ministers on 5th and 6th April; Development Ministers possibly on 8th April; and Social Affairs Ministers possibly on 29th April. There will be an informal meeting of Finance Ministers on 26th April.
Ministers at the joint Foreign and Finance Council will consider the external financial commitments of the Community and will undertake an overall review of Community budgetary questions.
At the Foreign Affairs Council, Ministers are likely to discuss the outcome of the European Council to be held on 1st and 2nd April. They may also consider the problems posed by the creation of a 200-mile fishery limit; passport union; progress of the work in the four Commissions set up following the Conference on International Economic Co-operation; relations with Portugal; the Council for Mutual Economic Assistance, Greece and Iran, and tropical products in the context of the multilateral trade negotiations. Ministers will have before them the arrangements for the signature of agreements with the Maghreb and will review progress in the negotiations with Spain.
Agriculture Ministers will discuss amended arrangements for beef imports, provisions for sugar imports from ACP countries during 1976–77, the exclusive use of butterfat and milk proteins in dairy products and a number of proposed measures for improving agricultural structures.
Ministers at the Development Council are likely to consider development co-operation issues arising from the discussions of the Conference on Inter-

national Economic Co-operation. They may also discuss the estimated trends for gross Community aid payments to the Third World financed from the Community budget or by member States; the implementation of the resolution on the harmonisation and co-ordination of development co-operation policies within the Community; Community financial and technical aid to non-associated developing countries; possible Community participation in the International Fund for agricultural development, food aid following the World Food Conference and relations between the European Communities and non-governmental organisations specialising in development co-operation.
The informal meeting of Finance Ministers will discuss unemployment.
Social Affairs Ministers will have an exchange of views in preparation for the World Employment Conference and will also consider the employment situation within the Community.

Mr. Hurd: The Minister's statement makes clear the great importance to this country of the matters to be discussed next week at the meeting of Heads of Government. Who is to represent Britain on this occasion? If the second ballot for the leadership of the Labour Party produces a result on 30th March, is it suggested that the new Prime Minister will have kissed hands and be able to go to Luxembourg for this vital meeting on 1st April, perhaps with a new Foreign Secretary? If not, and if the present Prime Minister is still in office, is it the Prime Minister's intention to take with him one or more of the surviving candidates for his office on the analogy of the Potsdam Conference in 1945? The matters to be discussed next week are of far too great importance to the country to be left to the party games of hon. Gentlemen on the Labour Benches.
Will the right hon. Gentleman give an undertaking that at the meeting of Agriculture Ministers on 5th and 6th April, the Minister of Agriculture, Fisheries and Food will give no further commitments about the common agricultural policy, particularly on the skimmed milk powder surplus, without the full and proper debate in the House which we have been promised and have not yet had?

Mr. Hattersley: I assure the hon. Gentleman without qualification that the rules to which we have ascribed to make it possible for the House of Commons to have the appropriate discussion before Community decisions are taken will be fulfilled.
I do not begrudge the hon. Gentleman his first point, but I think he understands that it is not a proper question for today. I assure him that the procedures which are now going on will make absolutely certain that we do not have the sort of hiatus which Mr. Macmillan created in 1963.

Mr. Jay: Is my right hon. Friend aware that some of us take these issues more seriously than do the Conservative Front Bench? Is he also aware that the House did not have the opportunity of a debate on the skimmed milk mountain before decisions were taken, and will he tell us for how much longer a proper debate in the House on the Order will be held up?

Mr. Hattersley: I accept the first point made by my right hon. Friend. I have discovered that fact to my cost on many previous occasions. The skimmed milk powder Order is essentially a matter for my right hon. Friend the Leader of the House. I share my right hon. Friend's view of the importance of the House expressing its opinion on these matters and I shall report his view, which is no doubt the view of many of my right hon. and hon. Friends, to the Leader of the House.

Mr. Grimond: Will the Minister tell us more about the meeting on 1st and 2nd April on the 200-mile fishery limit? Does his statement mean that the Common Market Ministers accept in principle the need for a 200-mile limit for each country, and will the Ministers responsible for fisheries be present at the discussion?

Mr. Hattersley: My statement certainly does not mean what the right hon. Gentleman suggested at the beginning of his supplementary question. The Common Market accepted the necessity for the creation of a common fisheries policy within days of Britain joining the Community, some would say rather suddenly and others would say in anticipation of

Britain's membership. That common fisheries policy was decided before the 200-mile limit was envisaged, let alone on the agenda of the Law of the Sea Conference. What has to happen now at the Heads of Government meeting and at other levels is to reconcile the common fisheries policy with the new possible 200-mile provisions. That will be done initially by the Foreign Ministers, and much of the detailed work has to be done in the Agriculture Council. I am sure the right hon. Gentleman is the first to recognise that substantial political points are involved and that it is necessary for the Foreign Ministers, and particularly the Foreign Minister of Great Britain, to speak about this subject very strongly.

Mr. Donald Stewart: In view of the representations made in recent weeks on both sides of the House about fisheries policies, does not the Minister consider that the subject should have the highest priority at the European meetings?

Mr. Hattersley: No doubt the most important issue to be discussed in the Community from Britain's point of view during the next three months is the common fisheries policy and the necessity to make changes in it as it stands. The hon. Gentleman and I do not disagree about that.

Mrs. Dunwoody: Is my right hon. Friend aware that, despite what the House thinks, the Commissioner for Agriculture takes the view that the scheme for milk deposits, particularly for feed manufacturers, is already operating? He repeated in Brussels on Monday that that was so, and that we should now be responsible for a series of deposits.

Mr. Hattersley: I was careful to say in answer to a previous question that the Government would observe the rules they set themselves as a result of the Foster Committee. One of those rules is an obligation to understand that sometimes Commission decisions as a result of negotiations have to be taken quickly and have to be implemented according to the rules and regulations governing the Community. That is what I said earlier and, whether my hon. Friend likes it or not, I fear I have to confirm it now.

Mr. Scott-Hopkins: Does not the Minister agree that it would be better


to postpone the meeting to be held on 1st and 2nd April until the leadership question has been decided and a new Prime Minister has been elected? Will he suggest that to his colleagues in the European Council? Will it not be necessary for the Minister to take a decision on the storage of protein at the Agriculture Ministers' meeting on 5th and 6th April? Will he give us an assurance that the House will be able to debate that subject before the decision is taken? The House has not yet had a debate on the deposit scheme which came into operation on 16th March and which is causing grievous difficulties throughout the Unted Kingdom. The subject was not debated properly either in the House or in Europe.

Mr. Hattersley: I must continue to remind the House that questions concerning specific debates must be addressed not to me but to my right hon. Friend the Leader of the House. If such a question is addressed to my right hon. Friend, he might want to consider how much was discussed during the general debate on agriculture on 12th February, when, some of us would argue, all the issues now under review were at least mentioned and an opportunity was given to air them.
The hon. Gentleman makes a number of assumptions about procedures now going on to elect a new Leader of the Labour Party. Whether or not they are completed by the time of the European Council, I have no doubt, looking at the wealth of talent at the top of the Labour Party, that we shall be adequately represented.

Mr. Powell: Will Her Majesty's Government co-operate with the French Government at the European Council to secure the deferment of the question of direct elections, if necessary indefinitely?

Mr. Hattersley: The right hon. Gentleman has information about the attitude of the French Government which is denied not only to me but, as I understand it, to the President of France.

Mr. Spearing: Whatever the outcome of the debate at the Council on direct elections, will my right hon. Friend agree that it is being debated on a document and that, according to the reply he gave

me on 10th March, that draft document, although available in summary form, will not be available to the House on Monday? Will my right hon. Friend explain, in view of the dried milk fiasco, why this House will not have the document on direct elections which is to be discussed at the Heads of Government meeting?

Mr. Hattersley: My hon. Friend always remembers my answers to him a great deal more precisely than I do. I assure him that we are anxious that the House should have as much information on this subject as is possible. That is why, quite unusually, we have produced a précis of the document at a very early date, in order that my hon. Friend and others should know exactly what are the contents of the document.

Mr. Spearing: Not exactly.

Mr. Hattersley: My hon. Friend, by the nature of the question, has not had the opportunity that I have had to read both the précis and the actual document. Let me assure him that when he reads them he will discover that the information provided for the House is exactly a replica of that in the document, although the document may expand the point in a number of particulars. But the document—[Interruption.]

Mr. Speaker: Order.

Mr. Hattersley: Although the document is not one which it is possible to present to the House at this stage, we are most anxious that the House should have the fullest information, and the House has received it.

Mr. John Davies: In view of the somewhat unhappy experience that the Government have had with skimmed milk powder, and in view of the Government's somewhat precipitate withdrawal from the metric noose tomorrow, may we be assured that no further action will be taken in the Council of Ministers on this vexed subject until there has been the opportunity to ventilate the matter in the House?

Mr. Hattersley: Yes, Sir.

Mr. Raphael Tuck: Concerning direct elections to the European Assembly, will my right hon. Friend always keep in mind that direct elections are a prelude to a


federal system in Europe, to which the Prime Minister has on more than one occasion expressed opposition?

Mr. Hattersley: That is not a view which I hold, but if my hon. Friend is able to catch your eye, Mr. Speaker, on Monday, when I understand that this subject is to be debated, no doubt the speakers who follow him will be able to convince him how wrong that point of view is.

Mr. Marten: As the balance of trade deficit with the Common Market, according to what I was told earlier this week, is now £2,354 million, compared with a surplus of £47 million in 1970, when will the Council of Ministers look at the so-called benefits of the wider home market which we were told about and do something about it, so that we at least get a slightly better chance in this market?

Mr. Hattersley: I have the good fortune to make the same point almost every month, which is perhaps an acceptance that the deficit has grown in the way the hon. Gentleman has described. I remind him, however, that all authorities on these matters suggest that our overall deficit on the balance of trade would be a great deal worse were we not members of the Community.

Mr. Hardy: Does my right hon. Friend agree that these rather disadvantageous agricultural arrangements might be just a trifle more acceptable if we did not have evidence that some of our Community partners were purchasing large quantities of Eastern European coal sold to them at below cost price? Will whichever representative of the Treasury Bench takes part in the international negotiations seek to encourage our partners to buy some British coal?

Mr. Hattersley: I am sure that if by any freak of chance that comes up next month my right hon. Friend will take it into account when he discusses it in the Community.

Mr. Fairgrieve: The Minister's statement that the Finance Ministers will discuss unemployment is most welcome. Will they also possibly again touch on and remind people of the question of monetary union, for the simple reason that, had we had this, we might not have

had snakes wiggling one way, only downwards, and the pound going only one way, namely, out of sight?

Mr. Hattersley: My difficulty is that I am always squeezed on the one side by those who are more enthusiastic than some of us and on the other side by those who are not at all enthusiastic. The hon. Gentleman is in the first category. I do not subscribe to his judgment about the advantages for the United Kingdom of membership of the snake.

Mr. Skinner: Will my right hon. Friend convey to Mr. Lardinois, who stated yesterday that if we do not observe the rules with regard to economic and monetary union the Common Market will break up within five years, that some of us on these Benches would like it to do precisely that? We shall not conform to the sort of gobbledegook that my right hon. Friend has poured out from the Despatch Box today, and we shall reject all those measures which we feel are not in this country's best interests. Mr. Lardinois ought to know from the outset what we are about. Does my right hon. Friend also accept that an increasing number of British workers are urging us to take this stand?

Mr. Hattersley: That is a statement of my hon. Friend's position. My own is to rely on the wisdom of the British people and follow the lead they gave in the referendum.

Mr. Jim Spicer: In his outline of the agenda for the Foreign Ministers, the Minister, made no mention of the problems of Southern Africa. Will he accept that we within the European Community have a particular relationship with the countries which are signatories of the Lomé Convention, and therefore accept that it is for us in the United Kingdom to press in particular the problems of Zambia and Zaire, which at the moment are virtually in a state of siege and blockade?

Mr. Hattersley: These matters are discussed in the political co-operation machinery of the Community, and it is not the convention—developed in this House during the history of business statements—for statements to be given about the political co-operation issues. I have no doubt at all that Community Foreign Ministers, formally or informally, will


consider these matters, but it is not an appropriate subject for me today.

Mr. Spriggs: Can my right hon. Friend inform the House whether the use of skimmed milk in farm feeding stuffs will affect the farmers' costs and eventually increase the cost of living?

Mr. Hattersley: I cannot answer that question without notice.

Mr. Eldon Griffiths: Reverting to the question asked from the Opposition Front Bench, will the right hon. Gentleman accept that proper concern that this important summit meeting should be a success and that Britain's views should be fully and completely heard at it is not a matter for party games, and that there is no such suggestion from this side of the House?
Does not the right hon. Gentleman know that the German Government have indicated that it would be convenient if the summit were to be postponed a little so that Britain could be properly represented? Would not the right hon. Gentleman agree that, in view of the Italian political congress now under way, it would be an advantage for Italy as well?
Will the right hon. Gentleman think again and consider whether it would not be wisest in the national interest that there should be a short postponement, in order that the very proper procedures on either side may be completed?

Mr. Hattersley: Of course, were we to believe a postponement to be in the national interest, or in the wider Community interest, we should wish to defer the meeting, but at this moment I am not convinced that that is the situation.

Mr. Torney: Is my right hon. Friend aware that the Commissioner for Agriculture, speaking in London yesterday, enumerated the terrible mess that the common agricultural policy is in and indicated its likely break-up, and that, in saying that, apparently he is now agreeing with a great many hon. Members of this House? Therefore, will my right hon. Friend take steps at the meetings which are to take place to press for a completely new agricultural policy for the Community which will take cognisance of the needs of Britain, especially those of the British consumer?

Mr. Hattersley: That is exactly what my right hon. Friend the Minister of Agriculture has been doing for the past two years.

Mr. Torney: My right hon. Friend is joking.

Mr. Fernyhough: Is my right hon. Friend aware, taking up the matter raised by the hon. Member for Banbury (Mr. Marten), that in the three years that we have been in the Common Market the visible trade deficit has totalled £5,547 million? Can he say how much of our overseas borrowings has been necessary to cover that deficit?

Mr. Hattersley: I cannot answer the precise question without notice, but the answer to the principle of the question is the one that I gave to the hon. Member for Banbury (Mr. Marten). No one has really any doubts that our economic situation overall would not have infinitely deteriorated had we left the Community on 5th June.

QUESTIONS TO MINISTERS (MR. SPEAKER'S STATEMENT)

Mr. Speaker: I myself have a statement to make.
I have given some thought to the points which were raised yesterday after the Prime Minister's Questions by the hon. Member for Fife, Central (Mr. Hamilton) and the hon. Member for Tottenham (Mr. Atkinson).
Supplementary questions to the Prime Minister have long posed a difficult problem for the Chair, and the matter was considered with great care in 1972 by the Select Committee on Parliamentary Questions to which, the House will recall, I referred in my statement on 16th February.
That Committee pointed out in its Report that supplementary questions frequently go wider than the Answers theoretically permit and said that it did not believe that the Chair should be asked to apply different standards to supplementary questions to the Prime Minister from those that are applied to other supplementary questions. On the other hand, the same Committee decisively rejected a suggestion that Questions to the Prime Minister might be purely extempore. Clearly the Committee


believed—and so do I—that the line must be drawn somewhere.
I have already endeavoured to intervene when supplementary questions to departmental Ministers have manifestly gone wide of the mark, and this, with the support of the House, I shall continue to do.
With regard to Prime Minister's Questions, when their content is clear and specific, I see no reason why the same practice should not be applied. When, however, their terms are general and vague, as most often is the case, for reason which hon. Members will know, I propose to follow the guidance of the Committee and to allow as much latitude as is consonant with the general rules of order.
I must make one final point with regard to the observations of the hon. Member for Tottenham, who I am sorry is not in his place, but I feel that I must make this statement today, having now had an opportunity to study his words in Hansard. The hon. Gentleman said:
Hon. Members have gone to the Table Office seeking to place a particular Question and have found that one set of rules applies to some Members and another set of rules to another set of Members."—[Official Report, 23rd March 1976; Vol. 908, c. 204.]
This statement does less than justice to people who serve all parties in this House quite impartially. I am entirely satisfied that the Table Office makes no differentiation of any kind between right hon. and hon. Members when advising them on the rules of Questions. I remind the House that, in deciding whether a Question is in order, I am the final authority and that, if a Member wishes a disputed Question to be referred to me, it is the duty of the Table Office so to refer it. This it has never failed to do.
I wish to place on record, therefore, my appreciation of the courtesy and impartial service rendered to the whole House by those who serve in the Table Office.

RHODESIA

Mr. Cormack: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important

matter that should have urgent consideration, namely,
the situation in Rhodesia and this country's relations with that territory consequent upon Mr. Ian Smith's rejection of the British Government's latest proposals for a settlement.
It would hardly be possible to exaggerate the urgency of the situation in Rhodesia and, in view of Mr. Smith's refusal to accept Her Majesty's Government's proposals outlined in this House on Monday by the Foreign and Commonwealth Secretary, it is important that the House should have an early opportunity to debate the whole complex issue.
That Britain has a de jure responsibility for all the citizens of Rhodesia, black and white, is not in dispute. Each day brings fresh news of moves on the African continent and beyond which have frightening implications for the future of those citizens. In these circumstances, I believe that they have a right to expect this House to recognise their plight and to discuss their future.
That these matters are specific and important and within the competence of this House to discuss is, I believe, self-evident. That they should be discussed immediately is, I equally believe, vital.
I trust, therefore, Mr. Speaker, that you will feel able to grant this request so that we can debate these issues tomorrow.

Mr. Speaker: I am grateful to the hon. Member for Staffordshire, South-West (Mr. Cormack) for giving me notice of his intention to raise this matter this afternoon.
The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the situation in Rhodesia.
As the House knows, under Standing Order No. 9 I am directed to take into account the several factors set out in the Order but to give no reason for my decision.
I have given careful consideration to the representations that the hon. Gentleman has made, but I have to rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 9TH APRIL

Members successful in the Ballot were:

Mr. John Stonehouse

Mr. Tony Durant

Mr. Frederick Willey.

BILL PRESENTED

CUSTOMS DUTIES (DUMPING AND SUBSIDIES) (AMENDMENT)

Mr. Richard Wainwright, supported by Mr. Cyril Smith, Mr. A. J. Beith, Mr. Clement Freud, Mr. Emlyn Hooson, Mr. Geraint Howells, Mr. John Pardoe, Mr. David Penhaligon, Mr. Stephen Ross and Mr. David Steel, presented a Bill to amend the Customs Duties (Dumping and Subsidies) Act 1969; to establish a committee to consider action to be taken on all applications for anti-dumping measures under this Act; and for connected purposes: and the same was read the First time; and ordered to be read a Second time upon Friday next and to be printed. [Bill 104.]

NATIONALISED INDUSTRIES (ELECTION OF MEMBERS)

3.58 p.m.

Mr. Bob Cryer: I beg to move,
That leave be given to bring in a Bill to make provision for the election of the members of the boards of nationalised industries.
The modest Bill seeks to carry out part of our manifesto pledge to implement industrial democracy and, in particular, Clause Four of the constitution of the Labour Party, which was adopted in 1918 to ensure that the means, distribution and exchange of production were under the most popular system of administration.
We have failed so far to implement fully both the letter and spirit of Clause Four in that we have not achieved a system of administration in the nationalised industries which has given the workpeople in those industries any impression that part of nationalisation is to give workpeople an involvement in control. Instead, over the years we have built up a tight, oligarchic rule drawn from an elite group which in general terms in no way represents the workpeople. How can the worker on the shop floor identify, for example, with Sir Richard Dobson, the newly-appointed Chairman of British Leyland? Departing from British American Tobacco with a goodbye present of £80,000, and prior to this having had a salary increase of £20,000, to make his total salary £58,000, he is now to work part-time for a public industry for £22,500.
There is no information open to hon. Members as to the method of Sir Richard Dobson's appointment, his hours of work or even whether he now knows where the factories are in the group. That is hardly an example to inspire the workers with democratic fervour. My Bill will be a first step to rectifying this dispensation of patronage and ensuring that the method of selection and appointment is clear and open.
An examination of some of the nationalised boards indicates how unsatisfactory the position has become. They are littered with retired civil servants and captains of industry who, no doubt, share in some measure Sir Richard Dobson's anti-nationalisation views. The Chairman of the British Steel Corporation, Sir Monty Finniston, receives £27,750 a year.


He is assisted by six full-time members, who draw between £16,000 and £22,500, and six part-time members, who draw from £1,000 to £4,000 each. The part-time members include the Dean of Nuffield College, Oxford, the Chairman of the Weir Group of Companies and a retired Permanent Secretary to the former Ministry of Housing.
The British Transport Docks Board, which owns and operates 19 active ports, apparently manages with a part-time chairman, who naturally, because of his limited availability, receives the reduced rate of £10,283 a year. In the same incredible way the British Airports Authority, which owns and operates seven major airports, has a part-time chairman on £9,000 a year. The British Railways Board has a full-time chairman, who will shortly leave office, and my Bill, if given Government support, could well provide the means for obtaining a replacement democratically instead of autocratically.
Sir Richard Marsh, who owes his present position to electoral success in the past, rubs along on £23,100. With five full-time members, the Board is supplemented by part-timers who pick up between £1,000 and £3,000 apiece. They include the Chairman of Pilkingtons, the glassmakers, who apparently can spare the time, a retired civil servant, who is presumably supplementing his meagre pension, and Lord Taylor of Gryfe. Lord Taylor of Gryfe supplements his part-time work on the British Railways Board with more moonlighting as Chairman of the Forestry Commission, and as part-time Chairman he receives a pittance of £6,200 a year. It is to be hoped that he receives suitable incomes from membership of the boards of Scottish Television Limited, bankers Whiteaway Laidlaw and Co., Friends Provident and Century Group and Scottish Metropolitan Co. Limited, to enable him to make ends meet. He is not untypical of some appointees to nationalised boards.
From what I have said so far, it will be clear that many board members are quite unable to devote their time to the interests of the nationalised industries. They give no lead to the workpeople either in philosophy, style of life or example. We need leaders in the publicly-owned industries who are not there merely because the money is good and they have the approval of a Minister.

They should be there because they believe in public ownership and in the democratic control of industry. The only way that that can be achieved is if they have a sense of responsibility to the workers by being elected by them.
My Bill proposes that nominations be made by both the Government and the workers for the chairmen and members of the boards. It would not be true to suggest that only the workers' nominees would be elected. There has been an example recently in Coventry where the former manager of Jaguar Cars, by his example and by his concern for the workers, and not solely concern for production, was able to win the workers' esteem and electoral support. If my hon. Friend the Member for Coventry, North-West (Mr. Robinson) had been a Government nominee, he would have had a good basis of support. The Bill would require that the two Government nominees with most votes served on a board in order to prevent the growth of narrow syndicalism and to enable the board to receive a broader picture of the needs of the nation as a whole as opposed to a single industry.
The electorate would be the full-time workpeople of the industry, and elections would normally be held every five years. But the Bill would include provision for variations of this pattern by regulation to meet the needs of special situations. I anticipate that voting would be at the work-place, by secret ballot in the well-tried manner. Voting at a work-place also involves discussion of the policies and personalities involved and is more practical and cheaper than a postal ballot, when the media might be able to exercise excessive influence.
Regulations made under the Bill would provide for the limiting of expenditure by candidates in the election documents, but the cost of the elections would be borne by the industry itself. On the other hand, since my Bill would provide a new and radical method of obtaining the leadership of these industries, new criteria would operate. The incentive would no longer be solely financial with the rules of the executive market place prevailing, with lavishly paid people seeking ever-increasing payments which places them on a salary level way beyond the wildest dreams of the average worker. People will come forward who want to


serve their fellow men, people who seek a good but not outlandish salary, people who want to see publicly-owned industries work both in financial and in Socialist terms. The lavish salaries currently paid would therefore disappear. Provision would also be made for report-back meetings with workpeople.
To those in this elected assembly who say that the system would not work, I say that they should give democracy a try. A number of vacancies are arising on the various nationalised boards and it seems an opportune time to implement my Bill. To those who say that talent exists only within a small group of capitalists and top civil servants, and that it is terribly difficult to find people to serve on these boards, I say that they have the wrong attitude. They are looking only within a tiny group of people who demand large salaries and are remote from the ordinary people. The evidence is, in any case, against them. The shop stewards of Chrysler brought to the House a plan of how the company could be turned into a viable concern with emphasis on a switch to products for the Third World. Lucas Aerospace shop stewards have brought schemes for switching production from armaments to production for peaceful purposes. British Aircraft Corporation shop stewards have produced a plan for the democratic control of their organisation. The talent is there if only we bother to look.
Technical knowledge and experience would continue to be available from the full-time officers of the corporations in the same way as such advice is available to local authorities which are composed of elected representatives. The responsibility of a board would remain a corporate one. Certainly the vast salaries currently being paid never seem to result in individual members of boards accepting the responsibilities that those salaries allegedly represent. Local councillors have responsibility for the expenditure of hundreds of millions of pounds, yet the working men and women who are elected seek no large salaries for that responsibility.
The wider responsibilities of the elected boards would reduce the possibility of such grave errors as the Stokermatic affair, which still burns brightly at the

National Coal Board, and the purchase of steel plants at £42 million from GKN at Brymbo and Cardiff, the investment of £4 million of taxpayers' money and the reselling of the plant back to GKN for £20 million by the board of British Steel which resulted in a loss of £26 million. Elected representatives would guard the public interest more zealously than has often been the case in the past.
There is a long tradition of industrial democracy in the trade union and Labour movements. At the beginning of the century the miners' leader, A. J. Cook, produced a plan for the coal industry called "Miners—The Next Step", which involved the complete democratic control of the pits. My Bill would not provide for that sort of structure, but at least it would be a good start and an indication that the Government mean what they say when they talk of industrial democracy.
The newly-elected boards would enter into negotiations for the evolving of democracy that would ensure that workers in the nationalised industries were involved in the decision-making affecting them. We have for too long held out to working people the prospect of a changing society. For too long we have retained structures that are based on the old bosses who, in many cases, leapt joyfully back into the cushy jobs they held under private ownership. We succeeded in changing only the sign over the door.
Industrial democracy is not a catch-phrase for the rank and file. It must apply to all, including the leadership. My Bill will give an opportunity to apply democracy to the nationalised industries. It is a small start but it is one that we should make, and I hope that the House will give its overwhelming approval to the Bill.

4.9 p.m.

Mr. Teddy Taylor: Mr. Teddy Taylor (Glasgow, Cathcart) rose—

Mr. Speaker: Is the hon. Gentleman rising to oppose the Bill?

Mr. Taylor: Most certainly, Mr. Speaker.
I hope that the House will reject this foolish Bill. Although we can understand the frustration felt by the hon. Member for Keighley (Mr. Cryer) and his


hon. Friends about the fact that the Government pay no attention to their outlandish views on industrial democracy, we do not want to add to the nation's problems by inflicting this solution on our State-owned industries.
There was one word which the hon. Member for Keighley never mentioned in his speech—"consumer". He talked about the need for workers being adequately represented, democracy for the workers and a change in the system, but he said not a word about the consumer. If there is anyone who needs protection against exploitation from the State-owned industries it is the consumer, who is sick and tired of nationalisation, which always means higher prices, fewer jobs and poorer services. If the hon. Gentleman wants to help the State-owned industries, he should look at them from the point of view of consumers, who are sick and tired of the prices now being charged and the amount they have to pay through their taxes for the extension of State control.
The hon. Gentleman wishes to extend democracy. The House should bear in mind the danger that we now face of bringing democracy into total disrepute because of a superfluity of elections. We are to have elections for the European Parliament, a Scottish Assembly and regional councils and now, it appears, for the boards of nationalised industries as well.
The hon. Gentleman has hit upon an important point. In two recent Bills the Government have committed themselves to industrial democracy without defining precisely what they mean. If the hon.

Gentleman and some of his hon. Friends do what trade union leaders have done recently and carefully examine industrial democracy, I am sure they will share the declining enthusiasm in the trade union movement for the principle of industrial democracy. The more one studies industrial domocracy, the more one realises that it could undermine the whole structure and basis of the trade union movement.

The hon. Gentleman has been scathing in his criticism of certain heads of the State-owned industries. It is interesting that those whom he attacked most vigorously, such as Sir Monty Finniston, are the products of working-class homes who have tried their best to help those industries, in spite of a Socialist Government. The Peers whom he criticised are Socialists, who are voting for Socialism at the same time as they hold the jobs he mentioned.

There are many things wrong with our State-owned industries which should be put right, but the hon. Gentleman's contribution has been further to emphasise the basic split in the Labour Party between the Social Democrats and the neo-Marxists. The Government should be trying to reorganise the State-owned industries to ensure proper protection for the consumer. Let us bring forward Bills to help the consumer, not to extend extreme Left-wing Socialism.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business):—

The House divided: Ayes 133, Noes 144.

Division No. 97.]
AYES
[4.14 p.m.


Abse, Leo
Colquhoun, Ms Maureen
Fitch, Alan (Wigan)


Allaun, Frank
Cook, Robin F. (Edin C)
Flannery, Martin


Ashley, Jack
Corbett, Robin
Fletcher, Ted (Darlington)


Ashton, Joe
Cox, Thomas (Tooting)
Forrester, John


Bagier, Gordon A. T.
Crawford, Douglas
Freud, Clement


Bain, Mrs Margaret
Crawshaw, Richard
Garrett, John (Norwich S)


Barnett, Guy (Greenwich)
Cryer, Bob
Garrett, W. E. (Wallsend)


Bates, Alf
Dean, Joseph (Leeds West)
George, Bruce


Bean, R. E.
Delargy, Hugh
Gould, Bryan


Beith, A. J.
Dempsey, James
Grant, George (Morpeth)


Bennett, Andrew (Stockport N)
Dunn, James A.
Grimond, Rt Hon J.


Bidwell, Sydney
Edge, Geoff
Hamilton, James (Bothwell)


Bottomley, Rt Hon Arthur
Edwards, Robert (Wolv SE)
Harrison, Walter (Wakefield)


Bradley, Tom
Ellis, john (Brigg &amp; Scun
Hart, Rt Hon Judith


Buchan, Norman
English, Michael
Heffer, Eric S.


Callaghan, Jim (Middleton &amp; p)
Evans, Fred (Caerphilly)
Henderson, Douglas


Clemitson, Ivor
Evans, Gwynfor (Carmarthen)
Horam, John


Cocks, Michael (Bristol S)
Evans, loan (Aberdare)
Hoyle, Doug (Nelson)


Cohen, Stanley
Ewing, Harry (Stirling)
Hughes, Roy (Newport)


Coleman, Donald
Fernyhough, Rt Hon E.
Hunter, Adam




Irving, Rt Hon S. (Dartford)
Miller, Mrs Millie (Ilford N)
Taylor, Mrs Ann (Bolton W)


Janner, Greville
Molloy, William
Thomas, Ron (Bristol NW)


Jeger, Mrs Lena
Morris, Alfred (Wythenshawe)
Thompson, George


Jenkins, Hugh (Putney)
Newens, Stanley
Thorne, Stan (Preston South)


Johnson, Walter (Derby S)
Noble, Mike
Thorpe, Rt Hon Jeremy (N Devon)


Johnston, Russell (Inverness)
Oakes, Gordon
Tinn, James


Jones, Dan (Burnley)
Ovenden, John
Torney, Tom


Kelley, Richard
Pardoe, John
Tuck, Raphael


Kilroy-Silk, Robert
Perry, Ernest
Wainwright, Richard (Colne V)


Lambie, David
Richardson, Miss Jo
Walker, Terry (Kingswood)


Lamborn, Harry
Rodgers, George (Chorley)
Ward, Michael


Lamond, James
Rooker, J. W.
Watkins, David


Lewis, Ron (Carlisle)
Ross, Stephen (Isle of Wight)
Watkinson, John


Lipton, Marcus
Sedgemore, Brian
Weetch, Ken


Loyden, Eddie
Selby, Harry
Welsh, Andrew


Luard, Evan
Shaw, Arnold (Ilford South)
White, Frank R. (Bury)


Mabon, Dr J. Dickson
Skinner, Dennis
Whitlock, William


McElhone, Frank
Smith, Cyril (Rochdale)
Wilson, Alexander (Hamilton)


Mackintosh, John p.
Snape, Peter
Wilson, Gordon (Dundee E)


McMillan, Tom (Glasgow C)
Spearing, Nigel
Wise, Mrs Audrey


Madden, Max
Spriggs, Leslie
Young, David (Bolton E)


Mahon, Simon
Stallard, A. W.



Marshall, Dr Edmund (Goole)
Steel, David (Roxburgh)
TELLERS FOR THE AYES


Maynard, Miss Joan
Stewart, Donald (Western Isles)
Mr. Dennis Canavan and


Mellish, Rt Hon Robert
Stewart, Rt Hon M. (Fulham)
Mr. Russell Kerr


Mikardo, Ian
Summerskill, Hon Dr Shirley





NOES


Adley, Robert
Grylls, Michael
Morrison, Hon Peter (Chester)


Aitken, Jonathan
Hall-Davis, A. G. F.
Mudd, David


Atkins, Rt Hon H. (Spelthorne)
Hamilton, Michael (Salisbury)
Neave, Airey


Baker, Kenneth
Hampson, Dr Keith
Nelson, Anthony


Banks, Robert
Hannam, John
Neubert, Michael


Bell, Ronald
Harvie Anderson, Rt Hon Miss
Normanton, Tom


Berry, Hon Anthony
Hastings, Stephen
Onslow, Cranley


Biggs-Davison, John
Higgins, Terence L.
Oppenheim, Mrs Sally


Blaker, Peter
Holland, Philip
Page, John (Harrow West)


Body, Richard
Hordern, Peter
Page, Rt Hon R. Graham (Crosby)


Boscawen, Hon Robert
Howe, Rt Hon Sir Geoffrey
Parkinson, Cecil


Bowden, A. (Brighton, Kemptown)
Howell, David (Guildford)
Pattie, Geoffrey


Boyson, Dr Rhodes (Brent)
Hurd, Douglas
Percival, Ian


Braine, Sir Bernard
Hutchison, Michael Clark
Powell, Rt Hon J. Enoch


Brocklebank-Fowler, C.
James, David
Price, David (Eastleigh)


Brotherton, Michael
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Pym, Rt Hon Francis


Brown, Sir Edward (Bath)
Johnson Smith, G. (E Grinstead)
Raison, Timothy


Buchanan-Smith, Alick
Jones, Arthur (Daventry)
Rees-Davies, W. R.


Budgen, Nick
Jopling, Michael
Renton, Tim (Mid-Sussex)


Burden, F. A.
Joseph, Rt Hon Sir Keith
Rifkind, Malcolm


Butler, Adam (Bosworth)
Kershaw, Anthony
Roberts, Michael (Cardiff NW)


Chalker, Mrs Lynda
Kimball, Marcus
Royle, Sir Anthony


Clegg, Walter
King, Tom (Bridgwater)
Scott-Hopkins, James


Cooke, Robert (Bristol W)
Kirk, Sir Peter
Shaw, Michael (Scarborough)


Cope, John
Kitson, Sir Timothy
Shepherd, Colin


Corrie, John
Knox, David
Sims, Roger


Costain, A. P.
Lane, David
Sinclair, Sir George


Dodsworth, Geoffrey
Langford-Holt, Sir John
Skeet, T. H. H.


Douglas-Hamilton, Lord James
Latham, Michael (Melton)
Spicer, Jim (W Dorset)


Drayson, Burnaby
Lawrence, Ivan
Stanbrook, Ivor


Durant, Tony
Le Marchant, Spencer
Stanley, John


Dykes, Hugh
Lester, Jim (Beeston)
Stradling Thomas, J.


Eden, Rt Hon Sir John
Lewis, Kenneth (Rutland)
Taylor, Teddy (Cathcart)


Edwards, Nicholas (Pembroke)
Lloyd, Ian
Tebbit, Norman


Elliott, Sir William
Luce, Richard
Thatcher, Rt Hon Margaret


Eyre, Reginald
Macfarlane, Neil
Walder, David (Clitheroe)


Fairgrieve, Russell
Macmillan, Rt Hon M. (Farnham)
Walker, Rt Hon P. (Worcester)


Finsberg, Geoffrey
Marten, Neil
Walker-Smith, Rt Hon Sir Derek


Fletcher-Cooke, Charles
Mates, Michael
Wall, Patrick


Fookes, Miss Janet
Maudling, Rt Hon Reginald
Warren, Kenneth




Weatherill, Bernard


Forman, Nigel
Mawby, Ray
Whitelaw, Rt Hon William


Fry, Peter
Maxwell-Hyslop, Robin
Wiggin, Jerry


Gilmour, Sir John (East Fife)
Miller, Hal (Bromsgrove)
Winterton, Nicholas


Goodhart, Philip
Molyneaux, James
Young, Sir G. (Ealing, Acton)


Goodhew, Victor
Monro, Hector
Younger, Hon George


Gow, Ian (Eastbourne)
Montgomery, Fergus



Gower, Sir Raymond (Barry)
Morgan, Geraint
TELLERS FOR THE NOES:


Gray, Hamish
Morris, Michael (Northampton S)
Mr. Iain Sproat and


Grist, Ian
Morrison, Charles (Devizes)
Mr. Patrick Cormack.

Question accordingly negatived.

Orders of the Day — SUPPLY

[14TH ALLOTTED DAY]—considered

INTERNATIONAL TRADE

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dunn.]

4.23 p.m.

Mr. Terence Higgins: I do not believe that anyone in the House would dispute that international trade is of vital importance to the economic survival of the United Kingdom. There is no doubt whatsoever that we as a country live by trade, and it was for this reason that the subject was chosen by the Opposition for debate today. The extraordinary thing is that, as far as I can establish, there is no precedent for debating this subject, despite its overwhelming importance. Certainly I cannot recall an occasion on which we have debated it, and the Library has been unable to establish any precedent, so that we are faced with a wide-ranging debate which raises a tremendous number of complex and diverse issues.
It is interesting to contemplate why this House has not previously debated this subject in its broader context. No doubt pressure of legislation of various kinds under successive Governments has had something to do with it, and perhaps a desire by the Executive of both parties to keep the matter off the Floor. But there is, I believe, no lack of interest in the House itself. It is true that we have from time to time debated exports, export credits and the problems of the textile industry. We have had one debate on monetary reform in the context of trade in the last 12 years and, of course, we have debated the European Economic Community in most general terms. But we have not looked at the whole range of subjects covered by international trade and it is this that I should like to do in my opening remarks.
The situation in other countries varies a great deal. Following the passage recently of the United States Trade Act, that country in addition to having, in

effect, a presidential negotiator, has subcommittees, both of the Senate and the House of Congress, which are in effect monitoring the proceedings of multilateral trade negotiations as they go along, which is a very interesting innovation. The degree of parliamentary control varies quite a bit between various countries, both in the EEC and outside.
I believe that, despite the risk that this could be an occasion for particular pressure groups to exercise influence on the Government, none the less it is right that these issues should be ventilated, and I am glad that we have an opportunity to do so this afternoon. The time we have available is very short—only half a day, with a cut-off at 7 o'clock following a statement and a ruling by yourself, Mr. Speaker, a Standing Order No. 9 application and a Ten-Minute Rule Bill with a Division.
I very much hope that, bearing in mind the obvious importance of these matters, the Government will find the time necessary for a further debate on this subject, and I hope that it will become a regular feature of parliamentary debates. We become too obsessed with legislation in this place and are not sufficiently preoccupied with debating major issues which are of vital importance to the country.
That having been said, I would stress that we want today to press the Secretary of State for Trade to take a lead in these matters. It is, of course, the case that we now operate within an EEC context, but we very much hope that the right hon. Gentleman's well-known antipathy to the EEC will not be a disadvantage but in this respect will in some ways be an advantage because there are a number of aspects of EEC policy which require reform and a number of areas in which we hope to add the weight of the EEC to a specific British viewpoint.
One of the main points I want to stress, therefore, is the importance of getting the Secretary of State for Trade to play a rôle in the EEC and, I hope, to take a lead as far as the EEC is concerned. Obviously there are many subjects we could discuss. I suggest that none of those which we have already covered—for example, textiles—although important, should be the centre-piece. I shall suggest a fundamental approach to what the trade policy of this country should be,


touching upon some specific problems in respect of invisible trade—invisible exports and imports—and East-West trade; some comment on the very important United Nations Conference on Trade and Development—the fourth UNCTAD—which is to take place very shortly; and, finally, some comment on multilateral trade negotiations.
First, it is important that we should turn to our fundamental approach to trade policy. Here, on the 200th anniversary of the publication of The Wealth of Nations, I am bound to say that I believe that Adam Smith was right and that we ought to press for freer trade, because that is the foundation for expanding world trade. That is extremely important if the prosperity of this country is to be advanced. Having said that and having spoken out against protectionism, we must face the fact that the matter is not all that simple. I want to say something about the growing pressure for import controls. Personally I believe that the main, fundamental case for free trade remains overwhelming. There are, of course, more theoretical viewpoints. Professor James Meade, in a two-volume work with appendix, pointed out the difficulties of proving that case, and there has been a great deal of talk lately about the Cambridge New School's view on the case for import controls. There, again, I am totally unconvinced. I find that the assumptions on which the arguments are based would be likely to be invalidated by the policies they are advocating on the basis of their analysis. At all events, the point needs to be argued.
I do not think that this is a partisan point between the two sides of the House. There is broad agreement on this side and among the bulk of hon. Members opposite on the danger of this country going in for protectionism. It is important that we should resist pressures to go into protectionist postures and the kind of double talk that we have had from a number of people on this issue, whether the argument starts off as one for selective import controls and gradually broadens out into wider advocacy, or whether it is one for more general import controls.
I do not want to get involved in any particular polemical matters which may be a matter of dispute between right hon.

Members, as much as hon. Members, opposite. I seek to persuade hon. Members opposite to take the view, which for example, has been put by Mr. Ron. Hayward, the General Secretary of the Labour Party, and a number of others—and I distinguish import controls carefully from dumping, because the crucial distinction is between fair and unfair competition—that the advocates of import controls are mistaken in believing that there is any case for the kind of import controls for which a number of people in the Labour Party have been arguing.
I find it very difficult to understand how they do not realise the dangers of going back to the 1930s—the very great danger that we could turn what is now a world depression into a world slump in precisely the same way that protectionism and beggar-my-neighbour policies in the 1930s turned that world depression into a world slump.

Mr. Douglas Jay: Is the hon. Gentleman opposed to protection and restrictions on agricultural and food products as well as manufactures?

Mr. Higgins: I shall come to that point when I speak about the multilateral trade negotiations.
The fundamental points are very simple on the idea that there should be more general import controls. First, general import controls would invite retaliation. I beg hon. Members opposite to appreciate that the protectionist pressures overseas are very great. I have travelled abroad, particularly to Washington, and I have no doubt that the danger of starting a trade war of the kind which I have described is very great. Even the very small measures announced by the Chancellor of the Exchequer in December produced a pronounced reaction in Washington, and, of course, many of the protectionist lobbies in the United States and elsewhere would welcome a move of this kind as a chance themselves to promote protection for their own industries in their own countries.
If that were to be so, world trade would shrink, and no one would lose more than the United Kingdom from such a shrinkage. I have no doubt that that is the fundamental argument, but there are others.
The second argument is that general import controls would reduce consumer choice, and that is not an unimportant matter. Many hon. Members even today have stressed the importance of maintaining consumer choice. In addition, such controls would reduce the competition that imported goods have exerted as a downward pressure on prices, which, in turn, tends to ameliorate inflationary pressures. That is an extremely important aspect.
The third argument concerns the idea that import controls would somehow give a breathing space to this country in which economic recovery could take place. I do not believe that it would create a breathing space in which British industry was regenerated. I believe that it would reduce competition and lead to degeneration. It would increase costs and add to the unemployment, not ameliorate it—the unemployment that those advocating these measures are themselves also anxious to ameliorate. It is very important that we should take an impartial and unbiased view and not press for a solution which would make our problems a great deal worse than they are—and they are bad enough.
Finally, there is the question of the floating exchange rates. We have recently seen a major change in the sterling parity. This itself in many ways is a form of protectionism in one sense, because it means that imports are more expensive and it makes our exports more competitive. I was disturbed when the Secretary of State for Trade, when he last answered Questions in the House, said that this was a matter for the Chancellor of the Exchequer. It is also very much a matter for the Secretary of State as well, because if we get reaction from abroad from those who believe that we are engaging in competitive exchange depreciation—again of the kind we had in the 1930s—that will be a very dangerous situation.
I hope that the Secretary of State will be able to make it clear, because the Chancellor failed to do so after the meeting on the Continent a few days ago, that such policy forms no part of the British trade policy, because once we got into that position we would once again be in danger of falling back into the old postures of the 1930s which have proved so dangerous in the past. I hope that the

right hon. Gentleman will be able to make it clear that it is not the Government's intention to get into that position. If that is so, the exchange rates were badly managed and the cut in the minimum lending rate, made immediately after we went through the psychologically important $2 barrier, was a sad event. The point should be taken in the context of our basic approach.
That having been said, the fact is that one can justify the position I have outlined only if we take effective action against dumping and unfair competition. I have discussed these matters with many trade associations, and my experience, particularly with the most sensitive industries, such as textiles and footwear, is that they are not convinced that recent voluntary agreements are adequate to deal with their problems. My impression is that all these industries would much prefer effective and faster action against dumping rather than a general relapse into protectionist pressures and a general system of import controls, which would be likely to damage them in their overseas markets.
I hope that the right hon. Gentleman will find himself able to take a more flexible attitude towards the problem of dumping. When he last answered Questions, he seemed to be adopting a more flexible attitude. He assured us that he was prepared to help complainants about dumping to find the data. Certainly, Government Departments are in a better position to do that than are individual industries and firms.

Mr. Robert Boscawen: Would not my hon. Friend agree that we want more than simply flexible reaction from the Secretary of State and that we need adequate reasons why he cannot stop dumping? We never get a fully adequate reply, particularly about the onus of proof.

Mr. Higgins: I hope that we shall get an explanation from the Secretary of State. Many hon. Members are particularly concerned about the problem of the onus of proof, which is difficult. There is the old adage in trade circles that "You dump and I price competitively". I think that there is always a problem with the onus-of-proof argument. But industry should be helped in the collection of data.
We also need to consider whether it is a sensible arrangement that a reference is made on dumping only if an industry as such complains. One sometimes gets divergent views between different industries and different firms about whether anti-dumping action is required.
One must take a balanced approach. I believe that a more flexible attitude on this matter, consistent with our international obligations, is much more what our industry wants than anything of the more general sort advocated by some who would perhaps like to see us slowly decline into a protected market—in effect, a siege economy.
I want to deal now with export credits. There has been controversy as to whether this matter falls within the competence of the Secretary of State in terms of signing agreements or within the competence of the EEC Commission. There is, however, growing concern that the extension of export credit may be getting too large. The Under-Secretary said in reply to a Question:
The current value of outstanding fixed-rate export finance made by the banks and guaranteed by the Export Credits Guarantee Department is £3,021 million."—[Official Report, 10th March 1976; Vol. 907, c. 243.]
Although there is the Berne Union arrangement, which is supposed to prevent excessive competition in credit terms, my impression is that this has been unsuccessful in preventing the situation where the developed countries, particularly in their trade with the less-developed countries, come out more and more in favour of extending export credit, on which they seem to have no unified position, but become more and more unified over rescheduling the debts subsequently incurred. I am far from sure that this is a desirable situation.
Our trade in invisibles is tremendously important. We have had debates recently on insurance. We appreciate, of course, the importance of the commodity market, the Baltic Exchange for shipping and other contributors to invisible exports. I am somewhat concerned about whether Lloyd's Register of Shipping and classification societies in other countries are getting freedom of access to the United States market. There is some indication that non-tariff barriers have been erected to their competing as regards the classification on both ships and oil rigs. In

contrast, the American classification society is able to compete freely in our market, for example on oil rigs. I hope that the Department will be prepared to look into this matter.
My other question on this point concerns our national merchant marine. It has always been tremendously important in terms of both the invisible earnings which we obtain from it and the benefit to our balance of payments. It is very much an industry where historically we have been and, I believe, still are remarkably competitive. As I said at Question Time recently, however, the growth in the Russian tonnage operating on a subsidised basis and at cut rates is placing in jeopardy our position not only in the direct trades but on the cross trades from which much of our revenue comes.
For example, container ships, in which a lot of investment has taken place, are affected by the combination of the growth in the Soviet merchant marine and the Trans-Siberian Railway which has led to rates being cut far below what seem to be economic levels, and this may have serious implications for the balance of payments. This is clearly an area in which some degree of communal representation needs to be made in terms of the OECD countries. I hope that the Secretary of State will give his attention to this very important matter for the sake of both our economic life and perhaps, within the wider context, of security.
I come now to Anglo-Russian trade generally. Just over a year ago the Prime Minister returned from Moscow with what he described as a tremendously important deal. We know that in the event comparatively little—by the Prime Minister's standards, very little—trade has developed. This may be due to the timing of the Russian five-year plans. But my feeling is that the Russians' need for grain and other agricultural produce may well encourage them to buy foreign exchange effectively at a very big premium, which will mean that their exports to us will grow fast.
Hon. Members in many parts of the House have expressed concern about the dumping from centrally-planned economies of particular consumer goods. Hon. Members from both sides have particularly mentioned footwear and textiles. The Government took action in that respect


in some ways a few days ago, but we have no indication of the criteria by which they decide on the figure to be selected in the negotiations. In fact, there appears to be no criterion whatever. It is purely an arbitrary figure which is plucked out of the air. Many of those in the textile and footwear industries feel that the arrangements which have been made are inadequate and that the definitions—for example, showing the difference between sandals and ordinary shoes—are open to abuse. We have not so far managed to take sufficiently effective action on that.
On export credits between this country and Russia, the Russians, admittedly because of our interest rates, but perhaps also because of international interest rates, are able to purchase textile equipment at far better repayment terms and at far lower interest rates than our own industry is able to do. That appears to be the case, but we have not been given the information on the actual terms extended to Russia. I see no reason why it should not be made available to the House, and I hope that the Secretary of State will take the opportunity to do that this afternoon. Overall, the policy which the Government are pursuing on Russian trade, on both imports and exports, is in serious need of reappraisal. It is not operating to the advantage of this country, and we need to look at it very carefully.
I come now to the United Nations Conference on Trade and Development, which is a matter of passionate concern to the right hon. Member for Lanark (Mrs. Hart) and to many of my right hon. and hon. Friends. Following the traumatic increase in oil prices, the position of the less-developed countries, particularly the poorest of them, has been very seriously eroded. The impact on them has been far greater than anything which has happened to the developed countries. That point is worth stressing and it lends added weight to the need for us to take an effective position in the UNCTAD in a few weeks' time. We must bear in mind that 60 per cent. of the Third World's earnings comes from trade in primary commodities, and it is upon this that the Secretary-General of UNCTAD, Dr. Corea—I had the privilege of meeting him yesterday—places a great

deal of weight. I hope that the Secretary of State will give us some indication of his position on that.
I hope that at UNCTAD IV we can make progress by consensus. A lot of passion has been aroused by the situation in the United Nations and its organs where the growing number of members from the Third World have the voting strength to carry particular resolutions. We should recognise that at the end of the day they end up with a resolution which the majority has carried, but that is all. It would be far better to reach a consensus arrangement which is worth something than merely to make political gestures.
We shall be interested to hear how the Secretary of State regards the proposals for commodities in the light of the Prime Minister's proposals at the Commonwealth Prime Ministers' Conference last year. They do not seem to fit in very well. After the dramatic and damaging way in which commodity prices went up in 1972–73, with the frightful effect on inflation for this country at that time, all of us would recognise the case for moves which would lead to greater stability in prices. The Secretary-General of UNCTAD is pressing for an integrated programme of commodity agreements covering 10 products. He makes the centre-piece of his proposal a fund which would not operate the schemes but would provide finance by various means. We would be interested in the Secretary of Slate's reaction to that. The important thing is that these measures should be to stabilise prices, but there is always the danger that instead they will try to affect the long-term trend.
I doubt whether that is in the interests of countries which depend on such commodities. If the long-term trend is downwards, it is important that those countries should diversify. We would be still more concerned if arrangements were made which had the effect of creating a series of OPEC-type bodies for different commodities which were positively designed to alter the trend and make it upwards. That, again, is not an effective way of giving assistance to developing countries. I know that there is a great diversity of opinion on this matter. Mr. Fred Bergsten of the Brookings Institution, for example, argues that there is a danger of the creation of numerous


OPEC-type organisations for many commodities. Mr. Bergsten is too fearful of that happening. However, there is a danger that we might create institutions which would tend to bring about that kind of situation.
Despite the difficulties which the Lomé Convention appears to be running into if Press reports today are to be believed, I think that we need to consider whether we can move towards a more general system of preferences, perhaps based on Lomé, which would not be restricted to countries which had formerly been associated with EEC countries. That may be the right direction in which to move, though there are serious problems regarding the repercussions on industries within the EEC.
Finally, I turn to the multilateral trade negotiations. Barclays Review recently contained a very good article entitled
World Trade Reform—The Forgotten War.
This issue, which has largely been forgotten, has not been debated to any great extent in this House. It is right that the EEC should take an outward-looking approach to the whole issue. I hope that the Secretary of State, partly for the reasons which I have mentioned, will adopt that kind of attitude to the negotiations. The trouble is that the negotiations have been significantly slowed down. Originally they were expected to be completed by the end of 1975. They are still going on in Geneva.
The impact of the United States presidential election normally has that effect. None the less, I hope that we can make progress on the technical side so that, when that issue is resolved, we can get down to solving the real problems facing us in this area.
It is important, as I have said, for us to do all we can to reduce tariff and non-tariff barriers to trade and make other arrangements which will lead to a growth in world trade. The snag—this was the right hon. Gentleman's point, and I am glad not to disappoint him—is that a considerable procedural wrangle is going on within the negotiations as to whether agriculture should be discussed only in the Agriculture Committee or in other committees as well. I understand that the United States, anxious to ensure that progress is made on the agricultural side,

particularly with regard to the CAP, has been pressing for the matter to be discussed in a number of different committees, whereas the EEC has tended to wish to restrict it to the Committee on Agriculture. I shall be interested to know the Secretary of State's position, given that this is a matter of some controversy in the House. We must resolve the matter if we are to make progress on the broader issues of trade generally outside agriculture.

Mr. Jay: Is it not more than a procedural difficulty? The EEC's negotiating position is that the principles of the CAP are not to be called in question at all. Does the hon. Gentleman support that position?

Mr. Higgins: This is something on which we want to inquire of the Secretary of State. It is a procedural point and a question whether—

Mr. Jay: It is more than a procedural point.

Mr. Higgins: It is more than a procedural point. It is both a procedural point, as the right hon. Gentleman points out, and a point of substance. We need to establish to what extent we can make progress without resolving this matter and what the dangers are. I hope that we shall have an indication from the Secretary of State regarding that matter. I do not underestimate the pressure in Washington or the pressure the other way in certain EEC countries. I had a long discussion with the American Secretary of Agriculture on this matter last summer. It is vital that this matter should not lead to the negotiations generally breaking down.
Another important matter concerns whether we feel obliged to go for a linear reduction on tariffs or for the kind of reduction on tariffs which will eliminate many of the American peaks on tariffs which have represented an extremely serious matter for our trade. With a succession of rounds having been completed, we are in a position where a percentage reduction across the board would not on balance be as favourable to our exports as a system which tended to diminish the various peaks on tariffs in the American structure at present.
There are a number of technical matters into which I shall not go now,


except one. It is important that on the non-tariff issue the Americans should understand how strongly we feel about the so-called "grandfather" clause which enables them to take countervailing action against exports from other countries which are not subject to the injury test. That is part of the General Agreement on Tariffs and Trade which requires radical revision. It all comes within the general context of the negotiations as a whole.
I hope that this will be only the first of a number of debates on this subject and that the Government will find time to debate it as well. By and large, this matter raises tremendous issues regarding both East-West trade and the important relationship of North-South issues. I hope that the United Kingdom can form a bridge in both those directions. I hope that we can form a bridge between the EEC and the United States and beyond to Japan and other countries. I hope that we can also form a bridge between the developed world and the Third World on a number of these issues on which I believe that we have a great community of interest. We should be in a stronger, not weaker, position to negotiate on these matters as a member of the EEC than we have been for a very long time.

4.57 p.m.

The Secretary of State for Trade and President of the Board of Trade (Mr. Peter Shore): I hope in the course of my remarks to take up a number of the points made by the hon. Member for Worthing (Mr. Higgins) regarding dumping, export credits, UNCTAD, the multilateral trade negotiations and other matters.
I should like to make two brief comments on certain points made by the hon. Gentleman. First, he invited me to take initiatives in the EEC in terms of the evolution of its trading and commercial policy. I take such initiatives as are available to me. I do not think that any of my right hon. and hon. Friends would expect me to be silent in that forum; far from it. We have a clear view of the right commercial policy for this country and we try to get it adopted within the framework of the EEC. That covers matters such as the multilateral trade negotiations, the Generalised Preference Scheme, the Multi-Fibre Arrangement—although that got under way before this

Government had a chance to take over—and various aspects of the North-South dialogue. The hon. Gentleman should have no doubt that we shall do our utmost within the EEC, but he should remember that, as a result of the decision that was taken, we are only one voice among nine. The institutional arrangements allow for a major transfer of initiative from member States to the Commisison particularly relating to trade.
The second comment I wish to make relates to the hon. Gentleman's reference to trade with Eastern Europe. We should approach that matter in a serious and commonsense way. Of course I am aware of the various products that come from Eastern Europe, some of which are highly competitive and some of which my hon. Friends and hon. Members opposite consider to be dumped. We shall watch out for them, as we have done in the recent case of those notorious East German suits, and we are prepared to act upon them.
But let us get the matter in proportion. Our trade with Eastern Europe is one of the areas where we are in substantial surplus—apart from the Soviet Union. They take from us manufactured goods which give work to our people and earn us valuable foreign exchange. We have a deficit with the Soviet Union, partly accounted for by diamonds which we process here, and which always distort trade figures, and partly by essential raw materials.
My concern and that of any responsible Government is to see that Britain's exports grow. As a result of neglect in the past of Britain's trading effort towards the Soviet Union, we export there less than half what France or Italy does, well under half what Japan does, and only about one-sixth of what Germany does. There is a substantial market, and if we are to get our share of it, it is no good pretending that we can offer credit terms inferior to those offered by our competitors. It is humbug for the hon. Member for Worthing continually to make that point.

Mr. Higgins: Is it not therefore sensible to ensure that the credit terms offered by all these countries in trade with the Soviet Union and other Communist countries are not driven down to levels


at which it is a very bad deal from all points of view?

Mr. Shore: My philosophy on this matter is perfectly straightforward, and exactly what the House would expect. I am not seeking to undercut, but I shall match the competition. I will not see our exporters put at a disadvantage when faced with more strongly based and more successful trading rivals in other parts of the world.
I can strike one note of agreement with the hon. Gentleman. I also welcome this debate. I agree that no subject is more important to us all than that of trade, which affects not just the prosperity but the very survival of this country. I should like to drive home a fact that is frequently overlooked. To feed our 55 million people, in order to obtain the raw materials essential for our manufacturing industry and essential fuel supplies at least until North Sea oil comes on to full stream, we have to spend on imports about £10,000 million a year.
To pay for those absolute necessities and the many other things that we require, such as semi-manufactures and capital goods, we must export goods and services in return on a massive scale. Indeed, no less than 30 per cent. of our GDP is exported in goods and services and well over one-third of the output of our manufacturing industry goes into the export trade.
This need to import and to export is the abiding reality of British life. We have therefore three continuing major objectives in world trade. First, we must seek an expansion of the world economy—an expansion in which all countries can share. Secondly, we must strive to ensure that world-wide markets remain open to our exports. Third, we must ensure that our goods and services remain competitive. It is necessary only to state our major objectives to realise the formidable problems that we face today.
We are in the grip of a major world economic crisis. After a quarter of a century of virtually uninterrupted trade growth, during which the volume of world imports increased at about 10 per cent. a year, in 1974 the rate of increase fell to 3 per cent. and in 1975 there was an actual decline in the volume of world

trade of no less than 5 per cent. Throughout the world, production has fallen, unemployment has increased and the struggle for export markets has been sharply increased.
The causes of the world trade recession are familiar, but because their effects are ongoing they are worth repeating. The hyper-inflation of 1973 in world trade in commodities and foodstuffs of all kinds, would itself have produced corrective action affecting trade and output in 1974 and 1975, but we had the additional and major impact of the quadrupling of oil prices at the beginning of 1974, which led to a violent redistribution of deficits and surpluses among nations.
In 1973, before the oil crisis really hit us, the OECD countries, collectively, were in surplus to the tune of $2·5 billion, the OPEC countries had a $3·5 billion surplus and the non-oil developing countries a deficit of $5 billion. In 1974, the OECD countries had a deficit of $33 billion, the non-oil developing countries had a deficit of $18 billion, and the OPEC surplus had risen to $67 billion.
Last year, surpluses and deficits were again redistributed radically. The OECD countries, as a whole, almost achieved a balance—they almost wiped out a deficit of $33 billion—the OPEC countries, as a result of greatly increased imports, reduced their surplus to about $40 billion and the non-oil developing countries plunged still further into deficit. The balance of payments recovery of the OECD countries was, of course, achieved at the price of economic contraction, falling production and rising unemployment throughout the Western world.
Our major problem has been and is to find a solution to this new set of problems. The IMF, the Eurodollar market and bilateral borrowings have all played their part in mitigating the consequences of these changes. I am glad to say that the OECD countries have collectively resolved to work together to achieve a new expansion of world trade. At Rambouillet, in November, the leaders of the major trading countries—the United States, Germany, France, Japan, Italy and the United Kingdom—agreed on the need to continue to consult together in order to get world trade moving again.
Some corrective action has been taken; this is particularly notable in the upturn


of the United States economy. World trade this year will undoubtedly grow, and there are even more valuable prospects for 1977, but the underlying problems of the financing of balance of payments deficits globally and of the redistribution of surpluses within the OECD area remain. It is right to stress that Trade Ministers can succeed in expanding world trade only if Finance Ministers can find the solutions to the problems of financing world trade.
Long before the events of the last two years, the problems of the developing countries were urgent and in some cases desperate. As the World Bank's recent report on the world economy in 1973 revealed, 61 per cent. of the world's population lived in countries with a yearly per capita income of below $500 and 30 per cent. where it was less than $200.
I have already referred to the dramatic effects that the oil price increase has had since 1973 for the developing countries. It is this, of course, that has given such a special urgency to recent discussions in UNCTAD and elsewhere, and it has led to far reaching proposals designed to give those countries a larger share of the world's income.
I shall shortly be attending the UNCTAD IV Conference in Nairobi. It is the next major international meeting between developed and developing countries at which a very wide range of trade and development issues are to be discussed. In particular, we hope for tangible progress in commodity trade. We should like to see agreement in the Conference to give impetus to the achievement of improved and more stable arrangements for producers—arrangements that will recognise at the same time the interdependence of the interests of producers and consumers alike. We have played a constructive rôle in recent negotiations on tin, cocoa and coffee, and we are currently exploring—though there are difficulties—the possibilities of international action on tea. Together with countries in the Community and the OECD, we shall actively pursue our objectives on commodity trade both at UNCTAD and, indeed, in other forthcoming international meetings.
There are naturally differences of view and emphasis between those engaged in the debate—differences which we have

played our part in bridging in the Prime Minister's initiative at the Commonwealth Heads of Government Meeting last May and in the subsequent discussions. Since then, although a considerable gap remains, a further step has been taken, with the agreement of the EEC countries, that the proposals put forward by the UNCTAD secretariat for an integrated approach are acceptable as a basis for further discussion.
I can assure the House that I shall not go to Nairobi with a closed mind on this or any of the other major issues upon the agenda. Clearly, the proposals will require greater elaboration and examination in detail. In relation, for example, to the proposed Common Fund, we shall need to be satisfied that a common institutional framework can play an effective rôle in this complex and difficult field. But if, at UNCTAD IV, we can initiate this further work with a will to find solutions, both at the political and practical level, we shall have at least one major and positive achievement to our credit.
There will also be discussion there of the continuing need of the developing countries for improved access for their exports of manufactured goods. Their special needs have been recognised in the Generalised Preferences Scheme operated now by most developed countries and in the commitments accepted by developed countries regarding the GATT multilateral trade negotiations. At the same time—and this is difficult, above all during a period of recession such as we are going through—we have to have a proper regard for the impact of trade liberalisation on our own producers.
I hope, in any case, that before the conference opens the Community, with other industrial countries, will have made offers on special concessions on tropical products as part of the ongoing progress in the GATT multilateral trade negotiations. Tropical products are of particular importance to so many of the very poorest developing countries, as the House knows.
The Nairobi conference will face up to other important areas of economic relations—resource flows to developing countries, including their debt problems; prospects for further trade liberalisation; and questions of building up their technological base, technological transfers, and


so on. We hope that constructive progress will prove possible in all these fields.
In the GATT multilateral trade negotiations, too, the position and problems of developing countries are assuming, I am glad to say, a much larger importance than in previous GATT rounds, including the Kennedy Round. The GATT should, in our opinion, remain the principal forum in which world trade problems as a whole are considered and dealt with.
There are three aspects of the multilateral trade negotiations that I should like to draw to the attention of the House. First, although previous GATT rounds have brought about major reductions in general tariff levels, there is still scope for further reduction. We are particularly concerned that the biggest reductions should be made, in genera], in the highest tariffs, and this is the line that the EEC is taking in the current discussions. Those who have studied the particular problems of tariffs in Europe and elsewhere will, I think, understand why this approach is one that naturally suggests itself to us.
Secondly, a particular feature of the current GATT round is the attention being paid to non-tariff barriers. In a world of reduced tariffs these are of larger importance though they embrace very complex problems. In the multilateral trade negotiations certain types of non-tariff barrier are being grouped together, such as quantitative restrictions, customs procedures and technical standards. We shall need, and no doubt we shall have to have, a flexible approach to these different problems.
Thirdly, as a corollary to the efforts to achieve a further and significant measure of liberalisation of world trade—I think that this will be welcome news to the House—it is even more vital that satisfactory machinery should exist to deal with disruptive imports. I am now talking not about dumping but about disruptive imports that come on such a scale and over such a period that they disturb the expectations and the possibility of adaptation by importing countries. The existing provisions under the GATT—I am thinking of Article XIX—are not wholely satisfactory, and we attach importance, therefore to the adoption of

new provisions that will allow a greater degree of selectivity in approach but with improved arrangements for international surveillance.
On the question of agriculture in the multilateral trade negotiations, there is no doubt at all that we have considerable difficulty in getting agriculture firmly on the agenda for discussion—and the reasons are well known. The original members of the EEC take a highly protectionist view on agricultural trade and they wish at all costs to maintain the fortifications which today surround the CAP. I should not like yet to say how far we have been able, as it were, to open the door or, rather, to get the door ajar. However, there is some arrangement now for what I think is called mutual surveillance and common disciplines, and at least an effort will be made by all those concerned to look at their own systems and to see, in the first instance, just what is the nature of the protection which they afford and then whether some common approach can be established for further negotiations. We shall help in all of this to the best of our ability.
I turn to our own position, as distinct from the general survey of world problems which I have tried to give. Our task in adjusting to the current world situation is doubly difficult because we have not only, with others, to deal with the problem of the oil deficit, but we entered the world recession and the oil problem with entirely different and serious problems of our own. In 1973, even before we felt the impact of oil, we had a widening balance of payments deficit. Indeed, in 1973 our current account deficit was £840 million, and in the last quarter of that year it was running at an annual rate of about £1,500 million—a much higher figure. On top of this we had the self-inflicted damage resulting from the three-day working week. Therefore, our balance of payments position at the end of the last boom was substantially worse than that of any of our major competitors. It seems to me that we have a very long way to go.
We have to look to expansion in world trade. We must certainly look to those of our trading partners who are in a stronger position, especially as regards their international payments, not to be too cautious


in reflating their economies. That is not a selfish point of view. The degree of recovery in world trade and the world economy is dependent upon their actions and it is, if anything, even more essential to the developing world than to ourselves that the course of recovery is unhindered. We are, unfortunately, restricted from taking a major lead in that process. This time our rôle must be to ensure that we are in a position to benefit as the general recovery of world trade proceeds.
We have many problems to solve. We still need to achieve a substantial shift of resources into investment and export. The need for more investment is self-evident, and I need not pursue that matter now. Certainly the need for more exports is clear if we are to make up the still large deficit that remains in our balance of payments. That deficit last year, even after the immense improvement that we sustained, still left us "in the red" on current account to the extent of £1,700 million. That was how we ended last year. Therefore, we still have a long way to go. For this reason we have further developed in the past year export credit facilities and other means to assist our exporters.
Four new facilities have been introduced in the last year in regard to export credit. I shall not repeat the details, which I hope are reasonably well known to the House. They cover, in appropriate cases, cost escalation, which helps exporters to deal with their problems flowing from our higher than average inflation, and they also deal with performance bonds, pre-shipment finance and certain risks of insolvency on the part of a consortium member, which is important for those who are engaged in large contracts with OPEC and other countries. Improvements have also been announced in the short-term credit facilities of the ECGD.
In all this activity there is a balance to be struck between the need to ensure that our exporters are not at a disadvantage vis-à-vis their competitors, while avoiding a race over credit support. Indeed, it is for this reason that we are playing an active part in negotiations to bring export credit competition under greater control. That is what we are trying to achieve. I hope soon to be able

to tell the House the results of these prolonged and difficult negotiations.
It is essential that the Government and our exporters deploy their efforts where the opportunities he. Even before the oil price rise, we were giving special attention to some OPEC markets. After the oil price increase, we strengthened and widened our efforts. As a result, the indications are that last year we achieved the largest increase in exports to OPEC countries of any country in the world. In terms of export growth, we did better than any other country in the world.
Now that recovery is in prospect in major industrial countries—and the countries of North America and Western Europe account for by far the largest proportion of our exports—new opportunities are opening. We can be encouraged by the fact that in last year's recession we more than held our share of world trade. That is a most encouraging and welcome development.
Our exports are now beginning to rise. In volume, they fell during most of 1975, but rose again in the last quarter of the year. In the latest three months, ending February, our exports were 4 per cent. in volume higher than in the previous three months. Moreover, a survey carried out in January of this year by my Department, in co-operation with the larger exporting companies, indicates that these major exporters are looking to an upturn in the volume of their exports this year amounting to 10 per cent. Recovery has begun, and there is a good prospect that it will continue. This is one important reason why it is so important to us that world markets should remain open. We have the prospects, and we must have an open market in which to sell our exports.
In May last year we subscribed to the renewal of the OECD declaration or pledge, with its emphasis on expansion and not restriction. However, I made clear at the time that our renewal was subject to two qualifications. The first was the fact that adequate finance should be available to cover deficits and, secondly, that the economically stronger countries should recognise their obligations to the rest of the world.
Inevitably, a period of recession places a particular strain on certain sensitive


sectors whose short-term problems cannot be met by an expansion of exports. Thus, the House will recall that last December my right hon. Friend the Chancellor of the Exchequer announced a number of selective measures to restrict certain imports. These were applied in conformity with the international rules which provide for action in cases of disruption. We have also taken anti-dumping action, about which I should like to say a few words.
The present recession has given rise to a large increase in the pressure for antidumping action. That is hardly surprising. In the last 18 months my Department has received 26 applications for antidumping action. It has imposed three duties, obtained six price undertakings to eliminate dumping, and found no dumping in three cases; five cases are being handled by the EEC. The remainder are in course of investigation. There is inevitably much work involved in an investigation, which cannot be short-circuited if we are to comply with the law and with our obligations under GATT.
I should like to address my next remarks to those who are genuinely concerned about these problems. Our aim is to bring all cases to a conclusion at the earliest possible moment. We are asking firms only for such information as we think essential to establish a prima facie case. We are anxious to assist in any way we can. I do not believe that this is an issue between myself and my Back Bench colleagues, or between the Government Benches and the Opposition Benches. We are entitled to take antidumping action. For once, time and international law are on our side. Let us take advantage of that situation. Let industry co-operate with the Government in providing evidence. We cannot co-operate without receiving reasonable evidence.

Mr. Doug Hoyle: Will my right hon. Friend explain why we cannot take similar action to that taken by other countries—namely, to put the onus on the importer in cases of dumping rather than to ask our manufacturers to prove their case? In many cases, particularly involving textile products, companies have gone out of business while investigations have continued.

Why cannot the onus be put on the importer to prove that he is not dumping?

Mr. Shore: There are one or two countries whose Governments take the line suggested by my hon. Friend, but nearly all major trading countries which subscribe to the GATT cannot, and do not, act without first receiving evidence. That is a requirement, but in my view it does not necessarily mean that we must envisage situations such as my hon. Friend describes, in which, for want of swift action, a firm is driven out while we are assembling the case. I can take preliminary and temporary action. I shall not do so recklessly, but I am willing to take action when a serious case is put to me.
I conclude by making one or two final remarks. First, the world trade and payments system is subject to great stresses. Nobody doubts that there are many major difficulties still to be overcome. I think that our economic international statesmanship will be tested to the full in the next few years. Although there is an upturn in world trade, the underlying monetary problems are still unsolved in terms of the world community, with all that means for world trade. Secondly, our balance of payments deficit, already greatly reduced, still remains far too large. It is our responsibility to get that right.
I wish to pay tribute to all those who have helped to improve our export performance in such a remarkable way comparing 1975 with 1974. We then saw a reduction in the trade gap of £2,000 million. That was wholly due to the efforts of Britain's workers and managers in the export markets.

Mr. E. Fernyhough: Does my right hon. Friend agree that the magnificent job done by our workers, managers and exporters has been principally outside the Common Market? Our exports to the Common Market have gone down.

Mr. Shore: My right hon. Friend is right. It has been disappointing to see that the share of our trade going to the EEC has fallen during the last two years. We must direct a far greater effort into the Community, because we have to do well there if we are to prosper in the years ahead.
The home and export markets go together. Firms whose products compete successfully in export markets will also, by and large, compete successfully with imports into the United Kingdom.
That does not mean there is not a great deal which can be done to save on imports into the United Kingdom. The House will know my attitude on this matter. I have tried to alert consumers and British industry through the NEDC network to have a constructive dialogue between purchasers and suppliers so that we can get a larger proportion of our needs from our home-based industries.

Mr. Bob Cryer: Will my right hon. Friend comment on the situation in which multinational companies are exporting British design and technology to Japan, importing the finished product from Japan and putting people out of work by closing factories in this country?

Mr. Shore: I am into the closing words of my speech, and my hon. Friend has raised a particular problem. I invite him to put it to me after the debate, because I shall be anxious to discuss it.
We cannot fully recover except as part of a world recovery. Our economy is now very closely meshed with that of the rest of the world. That is why countries in the strongest position must lead the way, in their own interests and in the interests of the trading world as a whole—not only the developed countries but the developing countries, with their enormous difficulties.

Several Hon. Members: Several Hon. Members rose—

Mr. Deputy Speaker (Sir Myer Galpern): Order. I remind hon. Members that the debate must, unfortunately, finish at 7 pm, and 15 hon. Members wish to take part.

5.32 p.m.

Mr. Geoffrey Dodsworth: The detailed length and content of both Front Bench speeches demonstrated the overdue necessity of this debate. Many of us are concerned that there should be the fullest possible examination of our international trade strategy. We are grateful for the detailed comments of the Front Bench spokesmen, although there has been a restriction in the time allowed for this debate because of earlier proceedings in the House.
This debate is all about trade strategy and our priorities by geography, industry and currency, and in politics. I regard the EEC as our home market and the power base from which we should operate. I was delighted to hear the Secretary of State say that his guiding star would be to match the competition. What a welcome conversion that is! It was music to my ears.
However, I hope that the right hon. Gentleman ensures that the ECGD is always aware of the competition being offered by other countries. This has so often been a bone of contention. I recognise the problem of proving the facts of a case, but in negotiations to decide new credit insurance arrangements we should not outwit ourselves and find our ability to compete reduced while other nations catch up. I say this not from any lack of confidence but as a warning. I have been active in exporting for many years and know from bitter experience how we can be out-manœuvred by Government departments of other countries. I hope that we shall not allow that to happen again.
Reference has been made to trade with the Soviet Union and Eastern bloc countries. There is a problem here which is simply shown in the illustration of what happens in the shipping trade. The Eastern bloc countries will decide to purchase fob but then insist that goods are carried in their own ships. They will sell cif but again insist that the goods travel in their vessels. These are machinations to our disadvantage. They create a real difficulty in our world shipping operations.
During the trade negotiations in February last year, we had an opportunity to make a deal on this shipping question, but we lost it. I asked the Under-Secretary at the time what action we were taking to ensure that we protected our interests while negotiating that trade deal. In choosing our strategy, we should not put ourselves in the hands of any one bloc. My motto for the Secretary of State would be "Don't put Britain in hock to any bloc". We must strike a balance in world trade.
We have an opportunity to develop the sale of our invisible export services to developing nations. We have a superb record, which is second to none in this field. With the Chancellor of the


Exchequer, I have attended a conference in Tehran, another in Caracas, with the governor of the Bank of England, and a third in Brazil. We are regarded as the world's financial management experts, and this is something that we can and must sell. Recent figures show that our private invisible earnings have topped £10,000 million for the first time. In 1975, they increased by 9 per cent., to £10,400 million—equivalent to 56 per cent. of Britain's visible exports. That is a terrific record, of which we can be proud.
Much of the increase in private invisible earnings reflected higher returns on overseas investments. Those who advocate that we should sell these investments in order to solve our economic problems should realise that we would be throwing away about £1,300 million a year.
We have to learn from the Committee on Invisible Exports that we have much to gain from exchanges and exchange visits. Trade exchanges can set up orders for the future and demonstrate to people how we conduct our business and handle our affairs. That would help us set up activists in every nation, to generate the trade that the Secretary of State wants to see.
There are opportunities for the Government to act. They can do much to help trade promotion. The Committee on Invisible Exports works on a shoe-string and would be grateful for more assistance. Invisible exports should be given the same sort of recognition that is given to visible exports. In Government Departments there is apparently a lack of understanding and awareness of the contribution that invisible exports can make. I am sorry to have to say that, but I believe it to be true.
It might also be helpful if, in the presentation of figures, we ensured that invisible exports were more clearly analysed to show their true contribution. For instance, they could be separated from Government expenditure, including overseas military expenditure and service payments on local government borrowing.
I am grateful for the opportunity to have taken part in this debate and I hope that it will not be long before we can have another and more lengthy opportunity to debate these problems.

Mr. Deputy Speaker: I am grateful to the hon. Member for Hertfordshire,

South-West (Mr. Dodsworth) who spoke for only seven minutes. If subsequent speakers follow his shining example, we may be able to hear a substantial number of hon. Members.

5.40 p.m.

Mrs. Judith Hart: I shall try my best to follow the excellent example set by the hon. Member for Hertfordshire, South-West (Mr. Dodsworth). I should be delighted to reply to the hon. Member for Worthing (Mr. Higgins) wearing my National Executive Committee for Import Controls hat, but I shall leave that to others, because I want to talk about our trading relationship with Third World countries.
I wish to consider two related aspects. The first is the general position of our trade with the whole world. We do not always fully appreciate the statistical breakdown of our exports. According to the 1974 export figures for commodities issued by the Department of Trade, we send £5·5 billion worth of exports to the EEC, £2·9 billion to the rest of Western Europe, £2·6 billion to North America and £5·8 billion to the rest of the world. The rest of the world includes the OPEC countries; exports to them which are growing but are still comparatively small; centrally planned economies—the Department of Trade's description of the Soviet bloc—other developed countries, which description, broadly, means Australia and New Zealand; and developing countries.
In 1974 the developing countries bought almost 18 per cent. of our exports of machinery and transport equipment, amounting to more than £1,000 million. They bought over 20 per cent. of our exports of chemical and pharmaceutical products and over 11 per cent. of our chemical elements and compounds. They bought almost 12 per cent. of our textile industry exports and almost 16 per cent. of the various ranges of manufactured goods. Those are substantial figures, and they are for 1974, when the developing countries were already in the state of desperate economic crisis that accompanied the rise in oil prices. Their rates of growth, which often reached 5 per cent. and 6 per cent. during the 1960s, had fallen to 2 per cent.—in some cases to barely 2 per cent. In other words, they bought those exports at a bad time for them.
We should make more of the goods which the developing countries need. There should be production for need as against production for conspicuous consumption—the production of the small truck rather than the second suburban motor car. When I was recently in Lesotho I saw perfectly designed small Toyota trucks produced by Japan whistling around. Why is not British Leyland designing, making and selling trucks of that kind? Let us produce what the developing countries need and by that means build up the trading relationships that we already have with them.
We should, of course, assist in promoting the rate of economic growth of the developing countries. There is a massive possibility for the expansion of trade for their good and ours. There is a deep identity of interest between us and them. This raises the issues of the UNCTAD Conference in Nairobi. Britain does not have a particularly good reputation at UNCTAD. In 1964 and 1968 we did not shine brilliantly, and the 1972 meeting was not at all a happy experience. If my right hon. Friend goes to Nairobi he may recall that in 1972 there was a fascinating exchange in the Chamber, when I challenged the then Minister of Trade—Mr. Noble, the former right hon. Member for Argyll—and accused him of attending the UNCTAD Conference in Santiago for only one day. He shot to his feet, interrupted me and said "No, no, it was a day and a half". I warn my right hon. Friend that any ministerial attendance at UNCTAD should be complete and that attention should be given to the fine print of the resolutions and amendments in committee. That is what makes or breaks Britain in terms of her achievement at UNCTAD.
The conference will be concerned basically with the various elements of the new international economic order. It will follow on from the declaration and programme of action debated in Manila by the Group of 77 three or four weeks ago. It was summarised to me in Geneva three weeks ago, when one of the leading members of the Group of 77 said:
We have condemned the traditional approach to negotiations. We do not present a list of requests but a global statement of what must happen.
That will be the firm approach of the developing countries at the meeting in

Nairobi. They retained their unity throughout the tremendous tensions of the Manila meeting. Let no one suppose that the tensions between the better off and the poorer developing countries—between Latin America and the African countries—will cause a breakdown between them at some point, and that we need not worry too much about an eventual confrontation. That was being said when I was involved in the Lomé negotiations and when Britain was involved in the sugar negotiations, and each time the people who said it were wrong. The developing countries will preserve their unity, which they regard as being of the greatest importance.
I cannot explore as I would wish the many issues that arise, including the reform of the monetary system and the link between commodity prices and the prices of manufactured goods. The developing countries say that their commodity prices fluctuate but that the price of manufactured goods from the rich countries always goes up. The question of debt arises, as well as the question of the ownership of natural resources, which is a self-evident proposition to the developing countries. Just as we have a right to own our coal, so they say that they have a right to own their tin and copper. They understand why the West quibbles about the ownership of natural resources, but do not think that they should. They believe that the pressure of the multinational corporations exercises too great an influence.
I want to concentrate for a moment on the Common Fund and commodity agreements. The 10 core commodities are all regarded as important. Progress can possibly be made on all 10, and certainly on some. Two countries—the Netherlands and Norway—have now said that they would support the Common Fund. The Netherlands is a colleague of ours within the EEC, What will the EEC say? Are we likely—I trust not—to feel ourselves bound to adopt a common EEC approach? I do not think that is possible, because the Dutch have gone out on their own and said that they will support a Common Fund. That means that there is the possibility of an individual approach. If that possibility materialises there will be no excuse for us. I say to my right hon. Friend and his colleagues that there will be no excuse


whatever for Britain behaving in any less progressive way than the Netherlands. We must also quite soon declare our readiness to say that we shall support a Common Fund.
My hon. Friend the Member for Newham, South (Mr. Spearing) put a Question to my right hon. Friend the other day, from the Answer to which it appeared that the cost of the Common Fund approach would be about £38 million a year. If I were still associated with the Ministry of Overseas Development, I should have thought that such a sum—coming in general from Government funds, but some of it, if need be, out of aid funds—would be as good a use of aid to the developing countries, giving them the basis on which to plan and to get the exchange earnings which they need, as many of the other projects on which we spend our money. But I trust it would be regarded as an extra to the aid programme.
Would it put up prices? It is worth considering that only in one or two cases is it likely that commodity arrangements under the Common Fund would be likely to produce an increase in prices. In most cases it would merely establish price stability.
Even where a slight increase in price might be involved, it is worth remembering, when we look at the price of a bar of chocolate or a tin of cocoa in the shops, that within that price only 6 per cent. is represented by the primary commodity; the rest goes in processing, packaging, marketing, advertising, and so on. Even in the case of tea, which needs less processing and treatment, the primary commodity element represents only 15 per cent., at the highest. For all products in the list, it is between 6 per cent. and 15 per cent. In view of what could be gained for us, as well as for the developing countries. I do not think we need regard price increases as a significant factor. It would occur only in the case of one or two commodities.
My right hon. Friend ought to go nap on the common fund. He ought not to hesitate. I hope that the Cabinet will agree that we must take an identifiably forthright and an identifiably progressive line at Nairobi. We need to take a much more positive approach than has been taken in the past. This is precisely

the moment for that positive approach, because we now have to recognise that an understanding of our own self-interest leads us directly to maximum co-operation with the Third World.

5.53 p.m.

Mr. Christopher Brocklebank-Fowler: I am always tempted by the right hon. Lady the Member for Lanark (Mrs. Hart), and never more than when she is talking about UNCTAD and with particular sensitivity about the problems of the developing world. However, in the interests of brevity I would rather refer to her right hon. Friend the Foreign Secretary and his response to a Question some weeks ago, when he said:
The longer I stay in this job, the more I realise that trade is becoming more and more influenced by Governments throughout the world. I sometimes wonder whether we in this country have a system sufficient to meet what we encounter overseas. I have particular thoughts in that direction. I am not being idealogical about this matter. It is a practical question of how we deal with overseas trade. This may need new instruments in this country."—[Official Report, 28th January 1976; Vol. 904, c. 414.]
Many of us, on both sides of the House, with some experience of the commercial world, realise that Britain's representation and posture overseas have become increasingly uncompetitive in relation to those of many other countries. In particular, I believe that we suffer from a lack of qualified staff on the ground and very inadequate organisation. It is for those reasons that in recent weeks I have put down Questions to the Secretary of State for Trade, to his right hon. Friend the Minister for Overseas Development, and to his right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs.
Considering first the Department of Trade, I was staggered to note that no members whatever of the right hon. Gentleman's staff, serving in this country or overseas, have recognised qualifications in market research, marketing, advertising or public relations. Furthermore, I was astonished to discover that none of them, apart from the right hon. Gentleman's own personal industrial advisers, has more than five years' commercial experience with a private company.
As to the Ministry of Overseas Development, again it was staggering to note that


it, too, had no qualified people in these respects. I suppose one can forgive that Ministry, for certainly under the right hon. Lady's leadership it was a little careful to be not too closely involved with trade matters, preferring to stick to aid, despite the fact that there is undoubtedly a developmental impact of trade, particularly in developing countries. I am glad to note that her successor has modified the right hon. Lady's policy slightly, and that he now at least recognises that trade plays an important part in development.
As to the right hon. Gentleman the Foreign and Commonwealth Secretary, in the rather typical manner of that office, he simply informed me that it would be too expensive to find out whether any of his staff were qualified. This, I believe, is the most disgraceful response to a very serious matter.
I hope very much that the Central Policy Review Staff will look very carefully into the staffing of these three great Departments of State to ensure that we have qualified people on the ground overseas. How often do those of us who visit overseas countries, particularly in the developing world, find members of Governments asking us why we deploy our resources so badly when they are so anxious to buy from us, so anxious to see British exporters, and so anxious to co-operate with us. It is true to say, as I have said in this House before, that the good will which exists overseas for Britain today, now that we have gone through the post-colonial era, is second to none.
Similarly, I refer briefly to the fact that geographically the Department of Trade, the Ministry of Overseas Development and the Foreign and Commonwealth Office again do not precisely match up. This shows a fundamental structural weakness in the capabilities of these Departments to consult with one another to the benefit of the overseas export effort. I note, too, with great regret, that there is no common regional export strategy which is identifiable as between those three Departments.
I believe it was a Conservative Government which set up the Ministry of Overseas Development's experiment with the development divisions; it has proved to be of extraordinary assistance to our development effort overseas. The House

will know that this enables regional specialists to be available to a number of countries over the area at a relatively small cost. In the West African Development Division there are engineers, agriculturalists, teachers, economists and sociologists available to all the posts in the whole of West Africa. The same is true of the other four regional divisions.
I wonder whether the Secretary of State for Trade would consider it worth while setting up a similar regional structure to give marketing and selling advice to the posts through, perhaps, a parallel organisation to the Ministry of Overseas Development's Development Division organisation.
It is absolutely essential that we begin to co-ordinate our regional sales effort on the ground. Let me take a brief example to illustrate what I mean. The right hon. Lady referred to the need for agricultural machinery. It so happens that we have some of the largest exporters of these commodities in the world. Yet it is remarkable that they still look at markets individually. Ghana is a different market from Nigeria; Nigeria is a different market from Sierre Leone. Although there is some sort of regional supervision, there is no regional inter-Government negotiation to see whether, by bringing the markets together, the export effort could be improved by making it more efficient, perhaps by setting up a regional manufacturing or assembly capacity from which, for example, assembled tractors could be re-exported to different parts of the region.
All this requires inter-Government effort and inter-departmental effort of very considerable importance, and I hope very much that when the CPRS reports it will have looked into this new trend in world trade and produced a plan for reorganising our posture overseas to take note of the points that I have made.
A terrible example of the lack of cooperation between Departments is to be seen in the fact that, on a day like this, only the Department of Trade is represented on the Treasury Bench. I should like to see representatives from the Foreign Office and from the ODM. I am not making a party political point but a serious point that international trade involves all three Departments and that, if we are to debate it, it would be very helpful for the Ministers from all


these Departments, and perhaps the Shadow Ministers, to come together and listen to what right hon. and hon. Members have to say.
I congratulate the ODM on its recent decision to restore allowances for pre-investment studies and to make available public money for that purpose.

Mrs. Hart: I indicated that I would not be tempted, but on this point I must be. The hon. Gentleman must be aware that this was a Conservative Government decision opposed by the official Labour Opposition, abolished by a Labour Government, and now restored by a Labour Government.

Mr. Brocklebank-Fowler: The right hon. Lady will forgive me for pointing out that the responsibilities of office bring an increased sense of reality. I am glad that her successor has shown such a sense.
The right hon. Lady will know that British investment in overseas countries, especially in less developed countries, can be not only an important springboard for development in the country concerned but also an additional source of invisibles, to which my hon. Friend the Member for Hertfordshire, South-West (Mr. Dodsworth) referred earlier. We should never forget that investment and trade are at least as important to the less developed countries as is aid itself. In this connection it is very important that we should make a concerted effort to export our intermediate technology to the less developed countries. We know that the ODM is shy of trade and that it prefers aid, but there is an enormous potential overseas for engineers, educators, agricultural advisers, and so on.
Although I welcome the recent appointment of a new chairman to the Agricultural Export Council, this, too, is another body which, in my view, is extremely badly financed, and one to which, perhaps, the Government should consider giving far greater support to enable these technologies, of which we have so large a surplus, to be exported to the mutual benefit of LDCs and to our balance of payments.
The Secretary of State will know that the Select Committee on Overseas Development is shortly to look at the role

of private investment and trade in the development of less developed countries. A report will not be published for a very long time, unfortunately. The study will take a year or so to complete. I hope that in the interim the CPRS will recognise the enormous potential for Britain overseas, especially to invest in trade with and to advise the less developed countries to our mutual benefit in times of domestic economic strain when increased aid is not practicable.
As I said just now, trade is always preferable to aid, even to the LDCs, and I hope that the CPRS will propose a substantial organisation for overseas representation and departmental liaison to enable the United Kingdom to exploit these important opportunities.

6.5 p.m.

Mr. Mike Noble: On a day when we are debating international trade, I am very surprised to see the Liberal Bench totally empty. I note particularly the absence of the hon. Member for Colne Valley (Mr. Wainwright), who earlier today presented a Bill on dumping, and the hon. Member for Rochdale (Mr. Smith), who has had a lot to say about our trade in textiles. He is in the building today, but he is not present in the Chamber to utter a word. I am sure that any constituents from the Northwest of England will be glad to see that there is, however, a fair scattering of textile and footwear Members in the House at the moment.
I am very tempted to comment on the recently concluded textile agreements. However, I refrain from doing so, in view of the time, and confine my remarks to the General Agreement on Tariffs and Trade. This is a treaty which is in urgent need of restructuring, in view of the changes that have occurred, some of which have been mentioned by Opposition Members and by my right hon. Friend the Secretary of State. My right hon. Friend dealt particularly with dumping, and I am pleased to see that recently the Department of Trade has acted with a little more speed in dealing with dumping cases. However, the procedure still leaves a great deal to be desired. In this conection, I take the point made by my hon. Friend the Member for Nelson and Colne (Mr. Hoyle), because there is no doubt that, as the procedure works at the moment, especially in this country, material


damage can and does occur before effective steps are taken to prevent the dumping of cheap imports.
There are difficulties of proof where we have non-market economies, as they are called, and now, as I understand it, in certain parts of the world there are difficulties where cross-pricing within multinationals takes place, so that the price on the market is an artificial one and is simply a book transaction within one company.
I take up the point made by the hon. Member for Norfolk, North-West (Mr. Brocklebank-Fowler) about Foreign Office staff. I am amazed that our embassies do not employ people with the specific resposibility of checking dumping allegations in the countries of origin. I put a Question on this matter to my right hon. Friend the Foreign and Commonwealth Secretary. To this, he again replied that he could not afford it. Taking the total cost of the unemployment caused, that seems to be a ridiculous answer.
But there is another matter that needs looking at, and it is the way that GATT operates with regard to trade as a whole. It operates at two levels. There is the aggregate level, to deal with balance of payments problems. Then there is the industry level, to permit structural adaptations to be made to compensate for changes in international trade.
It so happens that I represent a constituency in which the structural changes have had more effect than in most others, since my constituency is very much involved in footwear, textiles and paper. This problem will spread, because it is my guess that in about 10 years virtually every underdeveloped nation will want a motor car assembly plant, with all the other advantages of costs that they may have.
For a number of reasons, we have to reconsider the whole process of international trade. First, it is a fact that in recent years an increasing number of countries have taken measures that contravene the GATT. We have had our own country taking the step, eight or 10 years ago, of a temporary import surcharge, and this has been copied by France, Canada and Italy. We have had non-tariff barriers of the kind that we have now—voluntary restraint agree-

ments. We have had administrative restrictions. A firm in my constituency has just had a supply of slippers sent back from Eire because the words "Made in England" are on a label which is stuck on rather than being stamped on the product. How it is possible to stamp black on a black sock or a black sole, I do not know. The consignment has been sent back. I shall take the matter up at another time.
I understand that the United States of America has introduced 70 voluntary export restraint schemes since 1972. That shows that the GATT is failing to meet the problems that it is meant to deal with. It is falling into disrepute. But it has safeguards to enable countries to protect domestic industries. Article 19 authorises emergency measures to be taken to restrict imports if there is an actual or threatened injury to industry. That is interpreted according to the absolute level of imports of a particular type rather than on the degree of penetration. Injury or threat of injury is produced not by the volume of imports but by the degree of penetration into a particular industry. If the domestic market is falling and imports remain at a constant level, there will be injury. This has been seen in the textile and footwear industries in recent months, even when imports are falling.
The definition of injury is vague. I do not believe that anyone knows what the definition is. In the absence of a definition, I do not know how the Government can act specifically and quickly. Governments are afraid to use that article of the treaty because they fear retaliation and having to pay compensation.
The present structure of the GATT has been reduced to a farce. The Secretary of State and the EEC Commissioners have a responsibility to renegotiate the treaty. I hope the Government will bear that in mind.
My final point concerns competition with the developing world. In a recent speech in Basildon, the Secretary of State, referring to cheap imports, said:
Nor should we comfort ourselves with the pretence that cheap imports are unfair imports. Some countries are in fact able to produce goods very competitively—because they have natural advantages in raw material supply; because they have invested in more modern machinery; because their labour is either cheaper or more efficient than our own.


Certainly we cannot claim that cheap labour is itself unfair competition.
The point of importance in that is the Secretary of State's reference to cheap labour. We should be talking not about cheap labour but about low labour costs. If that cheap labour was slave labour we would throw up our hands in horror, but in much of the world workers are little wage slaves, and nothing more.
We should be asking ourselves, when competing with a country, whether there is collective bargaining there, so that employers face the same kind of costs, the same pressures and, therefore, the same final pricing costs as we do. We should ask what kind of social security benefits exist in such countries. The answer to that would usually be "None". In Malaysia for example, men working a 40-hour week in the textile industry are paid only £5·20. How can the Lancashire textile industry be expected to compete with that?
It is time that the Socialist countries of the world—the other EEC countries and ourselves—got together to produce a labour code to be attached to the GATT, which could be policed by the United Nations. If that is not done, the problems in the textile and footwear industries will continue to grow, and this kind of debate will become part of a recurring cycle, until the industries disappear altogether.

6.14 p.m.

Mr. Edward Gardner: As the Secretary of State pointed out, the deficit in the balance of payments is now leaving us "in the red" to the tune of £700 million on current account. But there is something which we can do to solve that problem. In the short term perhaps we cannot make an effective contribution by exports alone, but in the long term—and one hopes that it will not be a very long term—the solution will be an increase in exports. Those exports will come mainly from the private sector of industry and not from nationalised industries. I hope that the Government realise this.
Selling abroad is not fun. I have always suspected that it is not, and I am told by many people involved in the export business that I was right. The problems are depressing and formidable.

I detected some of the problems in Tokyo a few weeks ago on a wintry afternoon when I stood on the corner of the busiest part of Tokyo. Traffic jams there make ours look like civilised processions of traffic. I saw only three British cars in half an hour, and I greeted them with the same sort of surprise which I suppose Stanley reserved for Livingstone.
The indifference which some countries, certainly in Asia, show towards this country as a trading nation is disquieting. The best example that I can give the House is when, in Tokyo, I inspected a large wooden wall map. The sea was painted blue and various countries were raised above the blue sea. Represented on that world map, which was for the guidance of business executives, were all the countries in the world except one—our country.

Mr. Hoyle: Did the hon. and learned Gentleman make inquiries not only about the difficulties facing Britain in penetrating the Japanese market with our cars but about the difficulties which other countries face because of the Japanese barrier?

Mr. Gardner: Of course I made inquiries. I discovered that the Germans, Italians and others in Europe were getting into the Japanese market while our people were not.
I agreed with my hon. Friend the Member for Norfolk, North-West (Mr. Brocklebank-Fowler) when he said that it was a pity that in a debate of this kind a Government representative from the Foreign Office was not present.
I take this opportunity to speak on behalf of 500 of the loneliest business men one is likely to meet anywhere in the world. They are to be found in Taiwan, which I visited recently as a member of a mixed parliamentary delegation. If those 500 British business men were given proper support and were not deserted—as they feel deserted—by the British Government, they could make a considerable contribution towards balancing the deficit which is rightly troubling the Minister.
The right hon. Gentleman should bear in mind that those 500 business men have no Government support. They are doing a remarkable amount of export work and they feel that, if only they had some means of attracting the support and the


encouragement of the British Government, they could double and probably treble the amount of money which they are earning. I beg the Minister to see whether something can be done to help them. We have no diplomatic representation in Taiwan, and those 500 business men can obtain some kind of security only by relying on the Americans. That is a situation of which no one can be proud, and I hope that something can soon be done to remedy it.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Mr. Ron Thomas. [HON. MEMBERS: "Oh."] I did not realise that the right hon. Member for Jarrow (Mr. Fernyhough), who is a Privy Councillor, was seeking to catch my eye, and I had others in mind.

6.20 p.m.

Mr. Ron Thomas: I am worried by the artificiality of this debate. I find it strange that both Front Benches can divorce problems of international trade from Britain's present economic situation. Listening to the debate, one would not realise that we have about 1½ million unemployed, that our index of industrial production is lower than it was in 1970 and that capital investment was down by 12 per cent. last year and looks like going down another 14 per cent. this year. We have about 200,000 workers on short time, and redundancies are being reported to hon. Members day in and day out.
The Opposition Front Bench spokesman, the hon. Member for Worthting (Mr Higgins), offered us a lecture, including mention of Adam Smith and the 1930s. The hon. Gentleman did not tell us that America, Germany and the other industrial countries completely ignored Adam Smith and industrialised behind high tariff barriers. If they had listened to Adam Smith they would probably still be importing guns and knives from Birmingham and exporting nothing but wheat. It is nonsense to compare the present situation with the 1930s, when we did not have multinational companies, with their oligopolistic price fixing, transfer payments and so on, and their control over international trade.
Those of us on this side of the House who believe in import controls do not ask for them as an end in themselves,

and we do not want them on their own. We see them as part of a general economic strategy. We do not believe that the market mechanism suggested time and again in the House will get British capitalism out of its present crisis. We think of a strategy involving the regeneration of British industry by the direction of funds. We do not believe that that will happen unless there are import controls. We also believe in reflation to deal with the high level of unemployment. That cannot be done without import controls. The whole of our strategy is linked. Every proposal that we make relies on another.
My right hon. Friend the Secretary of State said that imports, both visible and invisible, accounted for about 30 per cent. of the gross domestic product. Our import bill last year was £24,000 million. We were told at the Labour Party Conference that it was red-blooded Socialist courage to have planning. We heard that we must have planning of wages. Is it suggested that imports and exports are not, and never will be, part of the planning mechanism, and that we should simply leave them to market forces and multinational companies? We believe in planning, including a planned trade policy. That is the essential point.
My right hon. Friend also told us, in true A-level or perhaps even O-level economic style, that we must export in order to import food, raw materials, fuel and so on. But he did not tell us that practically half our £24,000 million import bill last year was for finished and semi-finished manufactured goods. He did not tell us that if fuel is deducted from that bill, because of its distorting effect almost 60 per cent. of our imports are finished and semi-finished manufactured goods. In 1966 the proportion was only one-third.
The hon. and learned Member for South Fylde (Mr. Gardner) referred to the balance of payments deficit. Our deficit with the Common Market countries last year was almost £2½ billion, although the Common Market was supposed to save and regenerate British industry. Before we went in, we were almost in balance.
My right hon. Friend's official statistics in the Trade and Industry Gazette give the following import volume indices compared with 100 in 1970: food, 98;


fuels, 89; and basic materials, 78. It is not those items that are creating the balance of payments problems but semi-finished manufactures, for which the figure is 135; finished manufactures, at 183; and road and motor vehicles, at 203. They have doubled on a volume basis since 1970.
We are told that if we have any kind of import controls there will be retaliation. We do not accept that. We have already heard examples of import controls being introduced. The bulk of our manufactured imports come from—in order of magnitude—the United States, almost £1,200 million; West Germany, £1,100 million; France, £700 million; Japan £446 million; and Italy, £440 million. We have a considerable trade deficit with each of those countries. With the United States it is £574 million, Germany £724 million, France £460 million and Japan £362 million. We doubt very much whether any country will cut off its nose to spite its face because we take certain action to protect British industry, which is in a spiral of contraction and decline.
The United Kingdom took action between 1964 and 1966. France took action in June 1968, the United States imposed a surcharge in 1971, and Italy had an import deposit scheme from 1974 to 1975.
My right hon. Friend spoke of a resurgence in world trade. Twelve months ago my right hon. Friend the Chancellor of the Exchequer promised us a resurgence in world trade that would deal with unemployment. How many of the 1½ million unemployed will be put back in work by the resurgence in world trade?
Against our economic strategy, which includes import controls, all that the Conservatives can offer is deflation and devaluation, the classic ways of dealing with a balance of payments deficit. We have the deflation, and we have had a devaluation of almost 33 per cent. since we entered the Common Market. The hon. Member for Worthing suggested that imports helped to deal with inflation. He could easily do some economic analysis to show that imports have led to the devaluation of the pound. They have certainly helped to devalue it by 33 per cent. since it was floated. That has been the main force behind inflation.
My final point is linked to trade in terms of the Budget and the whole question of sterling. Two weeks ago the Sunday Times said that my right hon. Friend the Chancellor could raise tax thresholds in the Budget and then allow sterling to float downwards because
if the Chancellor can cut taxes by (say) £500m, he can devalue by enough to reduce real wages by rather less than that, without people being any worse off. A devaluation of 2 pe cent, would cut real disposable incomes by about £400m.
Therefore, the Conservatives' answer—further deflation and a further devaluation to meet our balance of payments problem—will not work. It will not get Britain out of its present economic crisis. Only a totally different economic strategy based on the Labour manifesto will do that.

6.30 p.m.

Mr. Tim Renton: I am delighted to be able to leave to the Under-Secretary, who will reply to this debate, the task of answering the points just made by the hon. Member for Bristol, North-West (Mr. Thomas). The hon. Gentleman referred to the artificiality of the debate. He was the only one who did so. I would have thought that the common complaint from both sides of this House had been, unusually for this Chamber, its brevity. Those who are winding up the debate have each left themselves only 15 minutes in which to do so, and brevity has been a requirement for all of us, though we would far rather have had longer time for the debate. I hope that the Government will find time for another debate on this subject in the future, perhaps even a series of half-day debates in which we can tackle individual subjects within the very broad context of international trade, because clearly we have had within three hours to compass a very broad spectrum.
I was particularly interested in the speech of my hon. Friend the Member for Hertfordshire, South-West (Mr. Dodsworth) on the subject of invisibles, of which he has very great experience. Clearly, the contribution of the City and the country generally to invisibles has been the mainstay and prop of Britain's external trade for many years past. It is against that background that I find incomprehensible the demand from a certain sector of the Labour Party that


banks and insurance companies should be nationalised.

Mr. Robert Adley: Does not my hon. Friend consider it rather disappointing that, while tourism accounted for 11 per cent. of our invisible earnings in 1975, neither Front Bench speaker thought fit to mention the subject?

Mr. Renton: Not at all. My hon. Friend will realise that unfortunately it is one of the subjects which have suffered in this brief debate this afternoon. My hon. Friend the Member for Norfolk, North-West (Mr. Brocklebank-Fowler) gave us from his deep experience of the subject a most interesting analysis of some of the problems in international trade at the moment. I hope the Secretary of State will see that his right hon. Friend the Foreign Secretary carries out a study of just how many people in his Department have commercial experience, because clearly, as commercial advice becomes a more and more important part of the service given by embassies and legations abroad, it is essential that members of those embassies should have a thorough background in the commercial matters on which they are advising British companies.
In opening the debate, the Secretary of State spoke about credit insurance. In the few minutes that I have available, I do not propose to go in any detail into the new policies which ECGD has introduced in the last year. I should like to congratulate ECGD on the flexibility and variety of its arrangements, but I thought that the Secretary of State showed remarkable inconsistency when dealing with credit insurance in relation to the USSR. He told us that in respect of that country both in insurance and—I take it—in credit terms it was necessary for this country to match the competition. But surely in this case there is a danger that the competition is continually driving the terms downwards, both in interest terms and in insurance, in the type of credit insurance and the length of credit offered.
In a degree, the Secretary of State seemed to recognise the point himself, because he went on to say later that he was anxious to see that a war in credit insurance did not develop and that he was taking part in negotiations to ensure

that it did not. I hope that the Under-Secretary will be able to clear up this inconsistency when he replies, because on many occasions at Question Time many of us have asked for details of how this famous bilateral trade pact with Russia was working out, but we never get specifics in answer. Therefore, inevitably, we are left with the impression, without having any bias against trading with COMECON countries, that it is working to the benefit of the USSR and to the disfavour of this country. I feel that Ministers owe this House a detailed explanation of whether or not this is happening.
I hope also that on the subject of credit insurance Ministers will be able to tell us whether they welcome credit insurance coming within European Community competence. The Secretary of State shakes his head, which shows his chameleon nature in relation to the EEC. But I wonder whether, when it is within Community competence, that will help him to clip the wings of some countries, like France and Italy, which may at times go further out of the way in offering excessive credit insurance terms than the ECGD wishes to do.
The hon. Member for Rossendale (Mr. Noble)—I hope that he is recognised by his constituents as a very good constituency Member—and the hon. Member for Nelson and Colne (Mr. Hoyle) both raised the question of dumping. I believe that there is a general sense of dissatisfaction in this House that, although the Secretary of State pays lip service whenever he appears at Question Time to his interest in dumping procedures and requests industry to bring him information, we are left with the feeling in this House that nothing special is being done. It is true that when dumping regulations are enforced customers may claim that this makes high prices higher, but this is a small price to pay if the effect of dumping is otherwise to transfer an industry from the home country to another country.
What we see from the pattern of past years, however, is that those nominally free trade countries which administer their trading pattern force the other free market countries to adapt to the commodity structure of exports and imports chosen by themselves. Thus, to be specific, we all


claim to be free traders within GATT but some, ourselves among them, are inevitably more free traders than others, and over the post-war period the two industrialised countries which have done best, Japan and France, have not hesitated to administer their international trading policy. I do not pause for one moment in my commitment to free trade, but I believe that Britain should always look at, and demand investigation of, all types of non-tariff barriers. Quality standards, pollution controls and safety regulations are the devices used by other countries which are nominally committed to free trade so as to protect themselves. This point was very well taken up by the hon. Member for Birmingham, North-field (Mr. Carter) in an Adjournment debate on 22nd January 1975, when he pointed out that in 1973 Japan exported to the rest of the world more than 2 million vehicles but that imports of vehicles into Japan amounted to just 37,000. He listed some non-tariff barriers such as design approval and emission requirements that were some of the causes of this.
In this debate many hon. Members have referred to the EEC and have felt that the Community should take a major initiative in the forthcoming UNCTAD negotiations. I support that view very strongly. I should like to press on the Minister a particular point: the dependence of the EEC for its vital raw material and mineral supplies on overseas sources. Is not this an area where the cost of developing a new mine overseas, for example, is now so large and where the political risk can be so great that it is both beyond the financial resources of an individual company within this country and beyond the size of risk that the ECGD itself wishes to take on board? I hope, therefore, that an EEC initiative will be developed in providing credit insurance against political risks for mineral and raw material developments in less-developed countries in the world.
There is another side to this coin in that the Community is a very important customer for raw materials. For example, it imports some 65 per cent. of all internationally traded copper. It will therefore have a greater influence on the policies of the producing country than any single country within the EEC would

have by itself. I believe, however, that the availability of political risk insurance for such development is now crucial to the financing of new mines and new raw material sources.
The right hon. Member for Lanark (Mrs. Hart), from her deep experience, spoke mainly about UNCTAD. It is now at the crossroads. The Group of 77 is pressing for action following the Manila Declaration. The market economy countries, with the exception of Norway and the Netherlands, are still holding fire and wondering how far to commit themselves. These are decisions which must be resolved within the EEC before UNCTAD IV meets in only six weeks' time. We hope that the EEC will take a positive and progressive attitude towards UNCTAD IV and will not simply be content with pious hopes and a stale reiteration of positions already adopted.
Here I take issue with the right hon. Lady on a matter of detail—only one of many details that I should like to have covered. She mentioned the commodity stabilisation schemes. It is so much easier to talk about them than to introduce and make them effective. I should declare an interest here as I have been a representative subscriber of the London Metal Exchange for many years.
I believe that commodity stabilisation schemes are politically desired by everyone. They are sometimes commercially feasible. When one looks back on them, however, one wonders whether a developing country has done better as a result of a scheme than it would have done without it.
I shall quote one example—copper. We know that the copper exporting countries have tried unsuccessfully to reach an agreement for many years. It is said that the need was for a buffer stock of about £400 million. In copper, there is a 30 per cent. scrap factor. Therefore, with such a stock, they could control only 70 per cent. of the market. With £400 million or more tied up in copper stocks, at the end of the day one must wonder whether that money could not have been better used in the form of grants or aid to those countries rather than being tied up in a physical stock of metal.
In considering the question of commodity stabilisation schemes rather than a theoretical commitment to them, let the


Secretary of State instead go to the City of London, where there is the greatest repository of expertise in futures markets in the world. Instead of knocking the City, the right hon. Gentleman should ask people there to act as devil's advocates as many of them do not believe in commodity stabilisation schemes, and to use all their available skills to produce the best commodity schemes possible, commodity by commodity, and then see what the result is. That I believe to be the most effective way of seeing in which commodities, and how, stabilisation schemes could be worked out.
We are all slowly coming to understand that the stability of relationships among the industrialised nations is influenced by the stability of Governments and institutions among the poorer nations. The Northern Hemisphere cannot afford to ignore the South. The EEC cannot afford to ignore UNCTAD IV or to see it end in utter disillusionment. The right hon. Gentleman said that he is not going to UNCTAD IV with a closed mind. I hope that his open mind will be full of ideas and that there will be greater awareness in the Government that UNCTAD IV is only six weeks away than was shown in his remarks.

6.45 p.m.

The Under-Secretary of State for Trade (Mr. Eric Deakins): This has been a brief debate, and I congratulate all those who have spoken on making their points so succinctly. It makes it much more difficult for me to reply to all the points raised, but at least there has been no beating about the bush.
The hon. Member for Hertfordshire, South-West (Mr. Dodsworth) suggested that we were not very good in the ECGD in matching competition. But the Department has very good relationships with credit insurers throughout the industrialised world, and there is a great deal of swapping of information about credit terms being offered by various organisations which can only be to our mutual advantage. We get a lot of information about what other people are doing. I do not believe that the Department or our exporters are as laggardly as the hon. Gentleman suggested in this respect.
The hon. Gentleman mentioned the shipping competition from the Soviet Union. That is too big a subject for me

to deal with at the tail end of the debate. My hon. Friend responsible will have noted the hon. Gentleman's remarks and his concern, which my hon. Friend shares.
I agree that we must strike a balance in our approach to world trade and not place too much reliance on trade with one bloc. That goes with every trading bloc, including those of which we are members. The danger is that our exporters, who were used to regarding the Commonwealth as their own preserve and were perhaps not exporting enough to the rest of the world, will perhaps come to see the EEC in that light now. That would be a mistake. The EEC is of vital importance. It consists of some of the richest and most highly industrialised nations. But there are other nations outside the EEC which are highly industrialised or are developing in that direction. We have to treat the world as our market place. It is an objective which our exporters must hold before them all the time.
The hon. Gentleman also stressed the importance of invisible earnings. We go all the way with him on that. We accept that there is need to expand our services overseas, but I am not aware that our invisible exporters are lacking in initiative and enterprise—far from it. I have met them in many countries, especially in developing countries, and I know that they are doing a good job. I do not think that they are in special need of Government assistance. They have the benefit, among other services, of the British Overseas Trade Board.
Invisible earnings are a matter not just for the City of London but of tourist earnings, for example, as well. We must not see invisible earnings through blinkered spectacles, seeing only what goes on in the City of London. There is a lot of invisible trade outside the City, and we should be proud of those domestic industries which play a large part in earning valuable foreign exchange.
My right hon. Friend the Member for Lanark (Mrs. Hart) spoke of the need to produce goods for use in developing countries. I agree with her 100 per cent. She instanced the small trucks which the Japanese were exporting successfully to many developing countries. I regret that our motor firms in the past have not


thought fit to produce goods of this nature which could find a market in the developing countries. One of the basic reasons why our motor-cycle industry's share of the market has gone down from 95 per cent. almost to nil is that it neglected the lighter end of the market, allowing the Japanese to come in, build up volume and take over sector after sector in the lower-price and cubic capacity ranges.
On the other hand, in Swaziland five years ago I saw a small tractor, a very simple machine—for example, with a very simple lever operation. I am not a technical expert, but it was without doubt a first-class invention. It was a British invention, and I hope that one of our motor car firms will take it up. It would, I think, help in our exports to the developing world.
My right hon. Friend and the hon. Member for Mid-Sussex (Mr. Renton) talked about UNCTAD IV—one of the most vital issues we are facing. Perhaps I may make a few general remarks about UNCTAD. This is an important subject on which I have met some members of the World Development Movement, and my right hon. Friend the Secretary of State has recently met the Secretary-General of UNCTAD to talk over the problems. The approach that we shall be making, together, we hope, with other developed countries, will be to ensure that this conference is much more successful than were the previous three. We shall approach UNCTAD IV in as constructive a spirit as possible. We hope that it will result in a worthwhile advance in agreement on international trade matters between developed and developing countries. Such a matter must be based upon a consensus, and it must be acceptable to the international community if it is to form the basis of action.
My right hon. Friend and one or two other hon. Members mentioned the common fund. We have not yet adopted a final attitude to it. We have not rejected it, but we have doubts about it. We believe that we should start, as the Prime Minister suggested at the Commonwealth Prime Ministers' Conference last year, with guidelines for commodity agreements, giving a general framework of principles. Within that structure com-

modities would be examined case by case. The point of this approach is that it is the only practical way to proceed. There should be negotiation on commodity agreements and then a decision about buffer stocks. They would be appropriate for some commodities, but that would not always be the case. Products such as tea and sisal would probably come in the latter category. Consideration will then be given to financing these stocks, and arrangements which might be necessary in other spheres, such as grubbing up tea estates in developing countries which ought to use their land to produce food for their people rather than tea for export, would be examined. A decision could then be taken on whether a common fund was necessary. We feel that to start with a common fund is rather to put the cart before the horse.

Mrs. Hart: Does my hon. Friend appreciate that the great problem is that people in Whitehall can sit down and work out their grand plans and the best possible strategy but that the confrontation to co-operation in Nairobi will be on the basis of the proposals put forward there? Those proposals will include the common fund.

Mr. Deakins: As I understand it, there was a meeting of the Trade and Development Board in Geneva yesterday or the day before, and there were signs of a certain amount of give in the positions of both developed and developing countries. There is a mutual desire to try to make things work at UNCTAD, and that approach is vital if we are to get international agreement. Every country recognises that UNCTAD will have a very heavy agenda. It will talk not only about commodities but about the whole business of debts for the developing countries, whether they should be rescheduled or whether the slate should be wiped clean. That is just as important, or even more so, as the question of commodities.
There is talk about the transfer of technology which involves multinational and some British companies. It raises the question of what more we can do to help transfer technology to the developing countries. Last but not least there is the vital question of trade access for the products of developing countries to the markets of the developed nations.
Together with the EEC, Japan and other countries, we have started to look at this matter within the generalised scheme of preference, but we have only so far scratched the surface. We have to bear in mind the effects of access on the employment situation in this country, and that means that we have to look to the industrial strategy which is, fortunately, a part of the Government's programme to alleviate the worst impact of exports from developing countries.
The hon. Member for Norfolk, North-West (Mr. Brocklebank-Fowler) said that there was a lack of adequate and qualified staff in Government Departments. He talked about a structural weakness. He should appreciate, however, that there is a structural weakness in British society. He said that many people in the Civil Service were not commercially qualified, and that may be true. But it is more trenchant to say that there are many people in British commerce who are not commercially qualified, trained or experienced. Many people in British management, unlike French, German or Japanese management, are professionally qualified neither in a technical sense nor in terms of management degrees and management education. We should therefore be looking to put our house in order on the management side.

Mr. Brocklebank-Fowler: Surely that is an invalid remark. Surely it must be the Minister's responsibility to ensure that the people who service him in his Department are qualified. We cannot expect the Government to reform the whole of British commerce, but we can expect them to put their own house in order.

Mr. Deakins: Where necessary, we employ consultants and technical experts to advise us on matters where appropriate. I do not believe that the hon. Member would want to change the system of recruitment and qualifications in the Civil Service. That would require a major revolution in British society—

Mr. Ron Thomas: Hear, hear.

Mr. Deakins: I fear that my hon. Friends may have misinterpreted my meaning, but it is splendid nevertheless to have a Conservative Member calling for a revolution in the recruitment system of the Civil Service.
My hon. Friend the Member for Rossendale (Mr. Noble) raised the question of dumping. The Government's record and present policy stand any amount of criticism. We have to proceed within the international rules of GATT and its anti-dumping code. We conduct our anti-dumping activities as flexibly as possible so as to offer applicants the maximum help. We help them in preparing their case, and in some instances we almost prepare it for them. We give them the benefit of any doubt in establishing material injury. Since inflation affects anti-dumping duties, we try wherever possible to avoid them and to get an undertaking from the exporter to raise his prices to a reasonable level.
It is said that we expect too high a degree of proof, but we must ask for some evidence. We want reasonable prima facie evidence. Applicants do not have to prove the anti-dumping case; that is the responsibility of my Department. But we cannot do it on the basis of allegations, hearsay or merely gossip. We have to have some factual evidence, and if persons are unwilling to provide it—I am sure they are not—we cannot proceed with those cases. My hon. Friend talked about GATT being flouted and gave examples of non-tariff barriers. He referred to Article 19 and non-tariff barriers. We shall be dealing with this as a serious and important subject in the multilateral trade negotiations currently taking place in Geneva.
It is in our interests to eradicate all non-tariff barriers. Our exports suffer more than those of most countries from these barriers since we have rather fewer of such barriers than most other countries. My hon. Friend talked about Article 19 saying that it needed revision because it did not refer to the degree of import penetration. I agree that it does not, but I remind him that our exports won a bigger share of world trade in 1975 for the first time since the 1950s. If my hon. Friend's reform had been undertaken in 1974, it would have opened the way for anti-dumping and other applications to hinder our exports to many of the markets where they have taken a bigger market share.
We have to ensure that if there are revisions of the GATT anti-dumping codes under Articles 12 or 19, which deal


with import restrictions, they cannot be used against our own exporters, who are doing a first-class job.
My hon. Friend mentioned cheap labour, but I remind him that British labour is cheap by comparison—

It being Seven o'clock, and there being Private Business set down by The CHAIRMAN OF WAYS AND MEANS under Standing Order No. 7 (Time for taking Private Business), further Proceeding stood postponed.

BRITISH TRANSPORT DOCKS (FELIXSTOWE) BILL

(By Order)

Order for Second Reading read.

7 p.m.

Mr. Nicholas Ridley: On a point of order, Mr. Deputy Speaker. May I draw your attention to Clause 6 of the Bill:
The agreement between the Board and the Company dated 21st November, 1975, set out in Schedule I to this Act is hereby confirmed and made binding upon the parties thereto.
Schedule I sets out the terms of an agreement which was made between the British Transport Docks Board and the Felixstowe Company. That agreement has ceased to exist, because the Company has changed. The directors are not able to make an agreement on behalf of their shareholders. Only the shareholders can enter into such an agreement. The shareholders, for reasons I shall not go into at this stage, have changed their minds.
My point of order is that the Bill is surely technically deficient in referring to an agreement which no longer exists. Therefore, I ask you to agree that the Question, "That the Bill be now read a Second time", should not be put until the Bill is brought to the House in a shape which is in order and correct according to the state of the agreement between the Board and the Company.

Mr. Deputy Speaker (Mr. Oscar Murton): I am obliged to the hon. Gentleman. All the requirements of Standing Orders have been complied with. The Bill is in order. Subsequent events which may have taken place have nothing to do with the Chair. The point made by the hon. Gentleman might be considered a good debating point for the House to consider. However, it is not a matter of order.

7.3 p.m.

Mr. Tom Bradley: I beg to move, That the Bill be now read a Second time.
I do not wish to weary the House with an elaborate explanation of the individual clauses of the Bill, which are simply put and make their intention very clear. The principal purpose of the Bill is to enable the British Transport Docks Board to acquire the ownership of the Felixstowe Dock and Railway Company.
In recent years Felixstowe has become one of Britain's most successful, flourishing and fastest-growing ports. [HON. MEMBERS: "Hear, hear."] I am glad that neither side of the House is in dispute about that. What was once a silted dock has grown into a modern port with roll-on/roll-off cargo facilities, passenger ferry services, cold-storage buildings and a high standard of handling equipment.
As an expanding port, it has been able to invest in all the new technologies. However, towards the end of last year the directors of the Felixstowe Dock and Railway Company came to the conclusion that they simply did not have the cash available to develop the port because despite the recent completion of a £10 million improvement scheme, at least a further £5 million was needed to spend on new cranes and other equipment.
Added to the problems of this financially highly-geared private company were certain political doubts. Rightly or wrongly, the directors were deeply concerned about the extension of the Dock Labour Scheme and the possible nationalisation of the Company at some unspecified future date. I mention these as matters of fact, not for doctrinal discussion between the two sides of the House.
The directors, taking those views, had to decide the long-term future of the port. Therefore, when the British Transport Docks Board last October, after preliminary discussions, made an offer to acquire the Felixstowe Company on a cash basis of 150p per share, the directors recommended it to their shareholders. A deal was agreed and was confirmed by nearly 88 per cent. of the votes cast at a shareholders' meeting on 21st November 1975. In effect, this Bill ratifies that contractual agreement.
I emphasise that the agreement was freely entered into and is set out fully in Schedule 1. I believe that it is still binding. Despite the control of the Company passing effectively to another concern in the meantime, that concern inherited that agreement. The opposition to this Bill tonight is neither more nor less than an exercise to use Parliament to breach that agreement. Frankly, I think that that is indefensible.

Mr. Ridley: Surely the hon. Gentleman is aware that no contractual situation exists until the shares have been

exchanged and payment has been made for them. Therefore, how can he suggest that the provisional agreement was anything near approaching a contract? It was just a provisional agreement, as he said.

Mr. Bradley: The directors signed the agreement. It was freely entered into and they have not departed from it.

Mr. Ridley: Mr. Ridley rose—

Mr. Bradley: I shall not give way to the hon. Gentleman. We cannot have a dialogue at this stage. The directors are holding to their original position. The agreement forms part of Schedule 1.
The directors have throughout supported and still support the Bill. They have not exchanged their 134,00-plus shares for the counter-offer put in by European Ferries.

Mr. Eldon Griffiths: I am grateful to the hon. Gentleman for giving way. I realise that interrupting him at the beginning of his speech is a discourtesy. I declare an interest in intervening in that I have been a director of one of the Felixstowe companies. What the hon. Gentleman said is untrue. I shall not go into detail now. However, it is not the case that the directors hold to the original agreement.

Mr. Bradley: The directors have made it perfectly plain that they are prepared to continue—

Mr. Eldon Griffiths: No.

Mr. Bradley: I shall give chapter and verse before concluding my speech, because I have a certain quotation to make later. I ask the House to note particularly that, were it not for the provisions of Section 17 of the Transport Act 1962, this deal would have been completed before last Christmas and would not have been the subject of discussion here at all.
In the meantime, there has been an alternative bid by European Ferries at a theoretically higher price than that previously agreed between the Felixstowe Company and the British Transport Docks Board. That offer is mainly in the form of a share exchange. Its ultimate value depends on the stock market valuation of European Ferries' shares from time to time. I believe that the share


quotation today is 64p, which makes the value of its offer only marginally above the 150p offer originally made by the British Transport Docks Board. I fully understand that the offer made by European Ferries has been taken up by about 81 per cent. of the shareholders, but not, I repeat, by the directors of the Felixstowe Company.
Why did not European Ferries make an offer at the time the British Transport Docks Board was in this business last October? The Chairman of European Ferries has suggested that no consideration was given to him or his company. I suggest that he and his company knew perfectly well what was going on. Indeed, in the Journal of Commerce of 6th February 1976 the chairman is quoted as saying:
We wanted to do it then, but quite frankly we weren't in a position because we had just come to the end of a rights issue and our share price was only two-thirds of what it is now.
So this company comes along and gazumps the offer of the British Transport Docks Board—

Mr. Peter Rees: "Gazumps"?

Mr. Bradley: I use that term because it is readily understood. No doubt Opposition Members will use a more felicitous expression—

Mr. Rees: Or a more exact one.

Mr. Bradley: —but I can find nothing better to describe the activities of European Ferries than to say that this company was gazumping the agreement of the Docks Board with the Felixstowe Company. It did so in the full knowledge that the directors of the Felixstowe Company have said, and are still saying, that it is in the best interests of the port, the security of the port, its users, its employees and the surrounding area that the ownership of the port should pass to the Docks Board.

Mr. Eldon Griffiths: It is not true.

Mr. Bradley: I am sure that the hon. Member will have ample opportunity to express the view that he holds so intensely. He is only delaying his opportunity of doing so by seeking continually to interrupt me.
I remind the House that the directors of the Felixstowe Company have throughout maintained a perfectly consistent position. They are not members of the Government, they have not been pressurised by the Government and they are certainly not Socialists. They are people who have built up a very prosperous port with links with the town, and their attitude must be respected.
What is the case against European Ferries, which has made a counter-bid to the deal done between the Company and the Docks Board? I suggest it is that European Ferries' main business is shipping. In my judgment and in the judgment of many better qualified people than I, it is a bad thing for a single port user to be in control of a port. It will quickly discover, should it continue with ownership, that it is impossible to balance its own long-term interests with those of other port users and the employees. Anyone with any knowledge of the port of Liverpool and of the difficulties with the Mersey Docks and Harbour Board will know what I mean. It is emphatically not in the national interest for any port to be in the hands of a single port user.
It is important that Felixstowe should remain free to maintain its existing business and attract new customers without being inhibited by a single-user owner. If the port of Felixstowe becomes part of the British Transport Docks Board business, it will continue to be operated as a multi-user port. It will enjoy the advantage of being merged with a larger organisation with a record of commercial success. No single user will be given preference at the expense of others.
The Docks Board has already demonstrated at its other ports the success of its policies of decentralised management and commercial expansion. Southampton alone is proof of that. Only today it is reported that Southampton has gained a new container service to the Far East, involving 35,000 containers a year, in direct competition with other ports.
The Docks Board has said that it will develop Felixstowe. It has the resources to do it and it means what it says. There will certainly be no drain on the public purse. The Board's cash flow is sufficient to buy the port for the


£5½ million on offer and it can go on with the necessary development of the port.
In their statement of 5th March, the Felixstowe directors confirmed their belief in the assurance of development given by the Docks Board. In a circular to ordinary stockholders they said:
Your Board continues to rely upon the assurances of BTDB for the long term development of the Port of Felixstowe and will continue to give support to the bill before Parliament not only because of the long term consideration but also because the Company is under a commitment to BTDB to aid and assist in and support the promotion of the Bill "—

Mr. Eldon Griffiths: Rubbish

Mr. Bradley: Did someone say that it was rubbish?

Mr. Eldon Griffiths: I did.

Mr. Bradley: I am quoting from the official circular issued by the Felixstowe Dock and Railway Company to its ordinary stockholders. That is the answer to the interruptions of the hon. Gentleman.

Mr. Eldon Griffiths: As the hon. Gentleman knows, I have a good deal of regard for him, but I am afraid that he is out of date. The directors have said today—I am sure that the hon. Gentleman is not aware of it, or he would not have said what he has—that they recommend all the ordinary stockholders who have not already accepted the offer by European Ferries to do so before 2nd April 1976. The individual members of the board have said today that they themselves are doing so. The board has certainly gone back on what it previously said, as the hon. Gentleman fairly described it to the House, but what he is now saying is no longer true. There has been a change by the board today.

Mr. Bradley: The board, of course, has always advised its stockholders that it would be to their financial advantage to take the offer of European Ferries, speculative though it is. Their position, as I have understood it, as directors is that they were not exchanging their 134,000-plus shares. If the hon. Member has later information than I am quoting, in print dated 5th March—which was certainly the position until yesterday—he has the advantage of me. It is my understanding,

however, that the Felixstowe directors are holding themselves to the binding agreement which they contracted with the Docks Board.
I know that it is part of the folklore of the Conservatives to denigrate public involvement in industry, but I want to disabuse their minds of any preconceived notion that they may have about the nationalised undertaking known as the British Transport Docks Board. This is not some frail, flagging, incompetent, inefficient publicly-owned organisation. It is a highly successful undertaking with an excellent record of profitability. Since 1972 it has been self-financing. It has borrowed no Government funds for its capital investments. The Felixstowe Dock and Railway Company was certainly supported by Government money in recent years.
In 1973 the Docks Board had a surplus of £11·7 million, showing a return on capital of 7·6 per cent. In 1974 it had a surplus of £12·1 million, showing a return on capital of 7·8 per cent. The 1975 figures are not yet available. It is well known that it was a difficult year for all ports. However, I am told reliably that when the British Transport Docks Board accounts for 1975 are published we shall see yet another improvement on the previous year's figures.
It is in the interests of employees of Felixstowe—I understand that they have expressed an open mind on this contentious matter—that the port should develop on as broad a base as possible, without being inhibited by a single port user. I do not wish to enter now the controversy over the Dock Labour Scheme. I have given my reasons for that earlier. As I have said, it is certainly, rightly or wrongly, one of the factors that influenced the directors in the first place to seek an arrangement with the Board.
I remind the House that the British Transport Docks Board docks are all schemed ports. The Board has learned to live with the Dock Labour Scheme. It has immense experience in the running of ports. On the average, industrial relations throughout the Board's undertakings have been far better than in the ports industry as whole. The TUC evidence to the Select Committee on Nationalised Industries in 1972 testified to that. With


great respect European Ferries is a shipping company and has never had to deal with dockers.
I Know that there have been anxieties—I fully understand them—about the Board's intentions. But the Board's policy is very clear. It is to encourage competition within and without its own port structure. Felixstowe will certainly continue to be free to compete with Hull and Immingham, which are BTDB-owned ports, and with other Board ports such as Southampton. There will certainly be no stranglehold, neither is it the intention that there should be. The Board does not permit cut-throat competition within its structure. However, it will certainly be in Felixstowe's interests as well as those of other people that it should become part of this vigorous and publicly owned sector of the transport industry.
At present the British Transport Docks Board accounts for about 25 per cent. of the United Kingdom seaborne trade. With the acquisition of Felixstowe that percentage will rise to 30 per cent. In other words, the British Transport Docks Board will remain in a minority position, and there will be continuing competition within the ports industry.
I know that petitions have been laid against the Bill. They are concerned about Section 15 of the 1962 Act. The British Transport Docks Boards has made it abundantly clear, and has given the necessary assurances to the various petitioners, that it has no intention of seeking compulsory purchase by the operation of Section 15 of the 1962 Act. It has no intention of invoking that section and it never has done that throughout its history. The Board is quite clear—it has expressed this repeatedly to petitioners—that it would come to Parliament if ever it required to acquire further land for development. However, that is an aspect that can be properly and adequately probed in Committee.
To sum up, I believe that Felixstowe is a national asset and that it is far too important to remain in private hands—hands which now belong to a single shipping company. I believe that it is the intention—I hope it is—of the present Labour Government eventually to bring commercially-owned ports in Britain into public ownership. The British Transport

Docks Board, in seeking to acquire Felixstowe, is taking a step in the right direction. Surely it is better to do it now than to leave the port with European Ferries for another year or two's uncertainty to hang over the dock before, in any case, it is taken into public ownership.
If the Bill is given a Second Reading tonight, ownership will move to a responsible and successful public body, over which this House will continue to have some control. I therefore urge my hon. Friends to join me in the Lobby tonight in support of the Bill.

Mr. Deputy Speaker: Before I propose the Question, it will be convenient to inform the House that Mr. Speaker has not selected the amendment in the name of the hon. Member for Edinburgh, South (Mr. Hutchison) and the names of other right hon. and hon. Members.

Mr. Max Madden: On a point of order, Mr. Deputy Speaker. Will you confirm that despite the existence of the Register of Members' Interests, it is still imperative for hon. Members to declare an interest, should they have one, in any legislation that is before the House? I did not hear the hon. Member for Bury St. Edmunds (Mr. Griffiths) fully. I did not hear whether he said that he had an interest as a director now, or that he had been a director in the past. May we have your guidance, Mr. Deputy Speaker, as to the need for all hon. Members participating in the debate to declare an interest if—

Mr. Deputy Speaker: Order. This is a matter for individual Members and not for the Chair. The Chair understood that the hon. Member for Bury St. Edmunds (Mr. Griffiths) did declare an interest as a former director of the Company. Perhaps that will clear the hon. Gentleman's mind on this point.

Mr. Ridley: Further to that point of order, Mr. Deputy Speaker. This matter cannot be allowed to go unchallenged. My hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) made a full and frank declaration of past interest.

Mr. Eldon Griffiths: Mr. Eldon Griffiths indicated assent.

Mr. Deputy Speaker: Order. It has been confirmed by the hon. Member for Bury St. Edmunds. It is not a matter


for the Chair; it is a matter for individual Members. However, I think that that settles the question.

Mr. Ridley: Further to that point of order, Mr. Deputy Speaker. I think that it does not settle the question. The hon. Member for Sowerby (Mr. Madden) may not have been present, or he may not have heard, but whichever it was, it seems to be absolutely monstrous and quite out-with the courtesies of the House that he should make an absolutely baseless insinuation against my hon. Friend the Member for Bury St. Edmunds. I therefore request you, Mr. Deputy Speaker, to ask the hon. Member for Sowerby to make a fulsome apology to my hon. Friend and to rebuke the hon. Member if he is not prepared to do so. It was one of the worst breaches of courtesy that I have heard in the House for a very long time.

Mr. Deputy Speaker: Perhaps the hon. Member for Sowerby (Mr. Madden) would care to reply to that suggestion by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). It is a matter for individual Members.

Mr. Madden: Further to that point of order, Mr. Deputy Speaker. I am sorry if I offended the sensitivities of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). I was asking you, Mr. Deputy Speaker, to confirm that it is imperative for Members to declare an interest in the proceedings of the House should they have one, despite the existence of a Register of Members' Interests. I was asking you to confirm what I had not heard fully, and to say that if a Member had an interest it should be declared during the debate.

Mr. Deputy Speaker: The House has debated this matter fully in the past. There is a register, and an understanding on the matter.

7.28 p.m.

Mr. Keith Stainton: Forthwith I bare my breast and declare an interest—a beneficial interest in 1,800 shares of the Felixstowe Dock and Railway Company, in regard to which I have accepted the offer from European Ferries.
Having said that, I should like to strike a note of amicability with the hon. Member for Sowerby (Mr. Madden). He has fought against me in campaigns in my constituency. We have been over the ground about Felixstowe Dock, on the spot. I am sure that the hon. Member will find much accord with what I shall say as the Member affected by this issue and not as the Member for the landlocked constituency of Leicester, East (Mr. Bradley) who might have been better advised, instead of concentrating his speech so much on invective vis-à-vis European Ferries, to concentrate on the content of the Bill, and the importance of Felixstowe and the A45, and all that goes with that, in terms of getting the produce out of his industrial area to the seaboard, the Continent and elsewhere.
The hon. Member for Leicester, East put his finger on the root of the matter but ended by taking a side-swipe at European Ferries. He said that he hoped that it would not be too long before the Labour Government found it possible fully to nationalise all ports. He put the matter in terms of another year or two of uncertainty. But it is that year or two of uncertainty that has provided the background of my campaign in Sudbury and Woodbridge ever since the by-election of 1963. Ironically, that has stood me in good stead in the township of Felixstowe.
There are three documents now before the House—the Bill, the three petitions, and the statement by the agents for the promoters. Our overriding concern must relate to the Bill itself. My purpose is to speak against what I consider to be a straightforward nationalisation measure—a disruptive and confiscatory measure, and, indeed, a measure that will not advance by one iota the well-being of the port of Felixstowe, its employees and users, the transport and shipping industry, and the nation at large.
Last year Felixstowe Dock and Railway Company, to give it its full and splendid title, celebrated the centenary of its foundation—100 years of mixed fortunes which have culminated in one of the most remarkable success stories of the individual entrepreneur and of British port development. Felixstowe is the only private port of any size in the United Kingdom, and it owes its existence and


much of its achievements to the present Chairman and Managing Director, Mr. Gordon Parker. When he took over 25 years ago the once grandiose concept of the Felixstowe Dock and Railway Company had been reduced to a small silted-up dock, rotting away, and unlikely to be used again. That, presumably, was the opinion of those enlightened gentlemen who were then in charge of the fortunes of the British Dock Board.
If at that time they had chanced their arm and "had a go", they could have made something of it but it was all left to the individual private sector to resuscitate the fortunes of the port. Now the port handles upwards of 4½ million tons of cargo a year, compared with a figure of 423,000 tons in 1965. Now the tonnage is up by a factor of 10, and since 1965 the number of ships has more than doubled. All this has been achieved by a slow, methodical build-up with, throughout, an eye to Europe.
Many said that it could not be done. Indeed, many people doubted it personally and averred strongly that it could not be done. But by working on a shoestring and ploughing back profits, by methodically building up and reshaping the port, by a young and enthusiastic approach, and by aggressive selling, much was achieved. I quote from the Financial Times of 14th March 1969, when the Director and General Manager of the Felixstowe Dock and Railway Company, Mr. Ian Trelawny, said:
We went out and sold the port of Felixstowe. We carried out market research into cargo patterns and movements, we advertised to specific trades, such as cars, timber and plastics, and we put in a lot of leg work at home and abroad trying to interest potential customers. All this was quite unusual for a British port. What's more, we were spending our own money.
Other important reasons for the development of Felixstowe included the creation of a bond of common interest with a work force willing to accept new handling methods. This led to a quicker turn-round of ships than was being achieved by any other rival in this country. This was combined with the development of the hinterland, with adequate assembly areas, wharves and cold stores, and also the role of Trinity College. I hope that we shall hear a good deal from both sides of the House about

the role of Trinity College and the land that it made available for this purpose.
By these means Felixstowe has had such success that it now finds itself eyed covetously by the public sector—the very people who sat in the Ministry of Transport in the late 1960s and told me that the A45 did not justify "trunking" between Ipswich and Felixstowe because they regarded our traffic projections as wildly optimistic. I went to see the Minister every month, armed with a census of traffic compiled by the county council. The Minister must have got so fed up with me that he caved in and relented. Under pressure, the National Ports Council invested funds to supplement those of shareholders.
I agree with the hon. Member for Leicester, East that substantial public money has been invested in this concern, but it comprises no more than 88 per cent. of the fixed capital, and none of the equity. Let us keep the matter in proportion. It is not for me to develop the point about the importance of the infra-structure imposed on the locality, because many of these loan tranches from the Department of the Environment have interest rate of up to 16⅛ per cent. This contrasts vividly with the borrowing powers and capital liabilities as set out in the last report and accounts of the British Transport Docks Board. Under the subheading "Capital Liability: Loans from the Secretary of State to the Environment", we see a figure of £76·9 million out of a total of £123 million. It is of the order of 70 per cent., with interest of 3·61 per cent. per annum, redeemable in 1978 at 8 per cent.
In Felixstowe dock, we have four roll-on/roll-off berths, a specialist container and bulk cargo-loading apparatus, and rapidly growing passenger ferry services. The ferry services started in the early part of last year, but in August alone 59,000 passengers were transported through the dock. From a labour force of about 30 men on a make-and-mend basis at the start, the last annual report and accounts shows 1,160 employees in the company's payroll. Aggregating all the dependent activities in the immediate hinterland, I estimate that there are between 3,000 and 4,000 people fairly directly engaged on business to do with the activities of the dock. They are all deeply concerned about their future.
The latest figures that I have been able to obtain on the efficiency of docks are, unfortunately, for as long ago as 1972, but it is as well to put Felixstowe in perspective with other docks, especially those run by the British Transport Docks Board with its magnificent return of 7½ per cent. on historically-valued capital. In terms of cargo divided by the number of dockers, the figures in thousand metric tons are 6·2 for Felixstowe, 1·3 for Liverpool, 1·4 for London, 1·7 for Hull and Goole—a BTDB dock—2·5 for Medway, 4·3 for Grimsby and Immingham—another BTDB dock—5·6 for Rotterdam and—I give this figure in the hope that the Scottish National Party will support us tonight—6·4 for Clyde. I apologise for not having been able to provide more up-to-date figures, but they are the latest available from the National Ports Council.
Although overtime bans have been part of Felixstowe Dock life from time to time, a hard-headed appreciation on both sides of the value of consultation, together with skilled planning and enthusiasm, has made Felixstowe into a veritable paragon compared with what has been referred to as the jungle of dockland elsewhere. The elements of success in this story are a determined, dedicated and responsive local private enterprise management—an enterprise not wedded to the past but constantly advancing—an eager, competent and involved team of employees and an aggressive build up of marketing, shipping and forwarding agents.
Why does the Docks Board, that creature of Government and happier twin of the British Railways Board—they were both born out of the same roan—want this Bill to take over Felixstowe? Why are there these political exclamations regarding European Ferries? Sir Humphrey Browne, the Chairman of the Board, said in a letter to The Times on 30th October 1975:
It has potential and is suitable for further investment and expansion.
He did nothing about getting it off the ground or through its serious phases of development. He has now discovered that it has potential and is suitable for further investment and expansion. One welcomes such a clear, flat-footed statement of basic business motives from a nationalised undertaking, but let us probe it further.
It is no secret that the Board has looked endlessly at Felixstowe over the last three or four years. From the mid-1960s, if not earlier, Felixstowe has been threatened with nationalisation. There is a whole sorry story, starting with the Rochdale Committee in 1962, whose report suggested the establishment of the National Ports Authority.
The Labour Party manifesto of 1964 made no mention of dock nationalisation. We thought we were in the clear, but along came the hon. Member for Bethnal Green and Bow (Mr. Mikardo) who, in 1966, chaired a Labour Party commission which suggested dock nationalisation. In 1969, we had the White Paper from the right hon. Member for Blackburn (Mrs. Castle) on the organisation of the ports, which precipitated into the Ports Bill of 1970. My hon. Friend for Harwich (Mr. Ridsdale) and I sat through the Committee stage of that Bill. We had got to the last lap when the Dissolution of Parliament was announced, we started a General Election campaign, and the Bill disappeared without trace. Since the 1974 elections, the social contract and all that has gone with it has made nationalisation increasingly more likely.
The Government's position is difficult to determine. We had proposals from the Minister on 20th August which were described in The Times as
wide ranging in concept, although vague in detail.
There has been a further consultative letter which, in my judgment, emphasised certain points, but made no substantial change.
The proposals of 20th August are in a vacuum. There is no Government statement on a concerted overall transport policy, though this has been much promised and long awaited. At present, 80 per cent. of overseas trade is through ports which are, in one way or another, already publicly-owned. Of our total trade, 25 per cent. is handled by the 19 ports operated by the BTDB. We are told with complete equanimity that this would rise to 30 per cent. if Felixstowe were taken over and that this would be inoffensive.
I find it offensive that the hon. Member for Ipswich (Mr. Weetch) can endeavour to refer the case of European Ferries to


the Director General of Fair Trading under the monopoly legislation, but does not find it appropriate to comment on the fact that, as a statutory authority, the Docks Board is exempt from any of the monopoly tests. The proposal of 20th August failed to recognise the vast changes that had come about in the dock industry since 1969. I refer to decasualisation and massive investment, of which there would have been more had there not been a constant nagging doubt in the background.
Throughout all that, Manchester and Felixstowe coped fairly well for themselves by themselves. It can be said that there has been duplication. I cite the example of the construction of two new major container terminals, one at Tilbury and the other at Southampton. I commend Ministers to reflect that the Southampton end was constructed by the British Transport Docks Board. The link ought properly to have been with the National Ports Council. I see no reason why that organisation should not be rapped over the knuckles and appropriately strengthened.
Against that background, Felixstowe encountered growing difficulties in rephasing its finances. Here I start to close with the hon. Member for Leicester, East. As a result of these measures and its financing difficulties, Felixstowe was thrown into the extended arms of the British Transport Docks Board and that, purely and simply, is the reason for the Bill.
The Bill is petitioned against by one of the port's major users, European Ferries, by the Port Users Association, and by Trinity College—not admittedly, in its capacity as a shareholder. The Bill is a grab for 150p per share when the net book asset value written down is 196·5p. It extinguishes competition between the Thames and the Tees. It is drawn in such terms that the so-called undertakings in paragraph 2 of Schedule I are qualified by overriding powers held by the Secretary of State under the Transport Acts of 1962 and 1968. The users of Felixstowe attach great importance to paragraph 2(a) and (b). It is qualified by such phrases as "financial policies and objectives" and "subject to general trading conditions ". It is qualified by the omission of freedom to compete on

specifically normal financial terms. Those words are not written in. I have endeavoured to have them written in, but have merely had an exchange of letters. I have been told that the Department of the Environment felt itself fully stretched in producing what is now within the Bill and that it would be difficult, if not impossible, to persuade it to go further.
If the Bill is successful, the logical course would be for it to go to Committee. I find it deeply offensive to read in the Bill and in the supporting document sent out by the promoters that in the event of a material alteration which is not acceptable to the Board, the Board shall have the option to withdraw. In other words, Parliament is being put under threat in terms of what it can or cannot do, otherwise the British Transport Docks Board risks turning tail and letting down the whole enterprise.

Mr. Dennis Skinner: Surely the hon. Gentleman is aware that there is a threat to Parliament the other way. Has not European Ferries told its shareholders that it will give an additional 15p for every share if the Bill is defeated tonight? Is not that a threat to Parliament? I suggest that it is a breach of Privilege. On the basis of his 1,800 shares, the hon. Gentleman is likely to pocket another £270.

Mr. Stainton: I ask this rhetorically, because I have not seen the hon. Gentleman's last election address, but did he not offer roads, hospitals and schools in his own constituency, or wherever, were he and a Labour Government elected? He has not a point there at all. I rest contentedly on my point about material alteration to the Bill.
In this enlightened age of worker participation the Bill is curiously drawn so as to take no cognisance of it. It is brought forward in the face of a bid worth, on paper, 190p—that is, 175p plus a bonus of 15p. If it passed the winning post it would be 46·1 per cent.—a vastly higher percentage than is offered by the British Transport Docks Board.
The hon. Member for Leicester, East talks about the market price of European Ferries shares. He was Parliamentary Private Secretary to a former Chancellor of the Exchequer. I am sure that the efforts of the last week or two, the reverberations of the vote in the Chamber, the


comments from his colleagues, the eloquent comment from the Stock Exchange when the index fell below 400, and the eloquent comments from the foreign exchange market mean something to him. Let us hope that once his endeavours in the present campaign for leadership are over—I wish him bonne chance—European Ferries and all of us will happily retrieve this situation.
European Ferries is a quoted public company with a dynamic record, adequate finances, a clean bill of health from the Director General of Fair Trading—who has examined its operations in detail—extensive experience of shipping and a good port ownership and operation record. It has received acceptances from 85 per cent. of the stockholders of Felixstowe.
The hon. Member for Leicester, East and the promoters of the Bill make much play of the green handout—the resolution passed by the 87·9 per cent. majority at the extraordinary meeting on 21st November 1975. We have to be precise about this. It was 87·95 per cent. of the votes cast. The votes against were 12·05 per cent. That gives us 100 per cent. in terms of votes cast, but as those votes represented no more than 62·92 per cent. of the total capital of the company, the assenting votes are not 87·95 per cent. but, according to my Boots the Chemists Japanese calculator, 55 per cent. of available votes.
The bid is unconditional. The Board is due to change, and I am informed that employee representation and the representation of local interests are very much in mind, as is a fresh extraordinary general meeting. There has been a mass meeting of dockers at which a vote was taken. The alternatives put to the men were these: first, "Do you favour the British Transport Docks Board?"; secondly, "Do you favour European Ferries?"; thirdly, "Should we let matters take their course? "
It was the third option that prevailed at that meeting. Indeed, on this point I quote from The Times of 7th October:
Mr. Albert Booth, Minister of State for Employment, visited Felixstowe yesterday to discuss extending the Dock Labour Scheme to the port.

I shall not go into that part, which is quite contentious, but the article goes on to say that the
senior shop steward said the men were in favour of the labour scheme, with its guarantee of employment, but they disliked the idea of nationalisation.
I also received, this morning, a large petition, which is headed:
We, the undersigned salaried employees of Felixstowe Dock and Railway Company, wish to record that we are giving our full support to European Ferries Limited following their take-over of the Company, and that we hereby require Mr. Keith Stainton,"—
that is a breach of Privilege if anything is—
the Member of Parliament of the constituency of Sudbury and Woodbridge, to do all in his power both personally and by the encouragement of his colleagues towards the defeat or withdrawal of the British Transport Docks (Felixstowe) Bill.
[HON. MEMBERS: "Who signed it?"] A vast number of people. The petition will be available for inspection after the debate, should there be any doubt as to its veracity or content.
I close now—[Interruption.] I must beg the indulgence of the House. As the local Member, I am more than a little concerned. [An HON. MEMBER: "Shareholder."] As to shareholding, I wish that whoever made that remark would address himself to the Chair. If we are talking about Members' interests, and slurs can arise after such a frank and straightforward declaration, I think that such observations should be made from a standing position, so that we would know who made them. I should then be able to address myself to them and deal with them properly. How else can I seek justice?

Mr. Deputy Speaker: I did not hear, in fact, any comments made from either side. If such comments were made as the hon. Gentleman has suggested, they should not have been made. The hon. Gentleman declared his interest at the very beginning of his speech.

Mr. Stainton: The interest is quite tiny. This organisation—I was about to say "institution" but it is far too dynamic to be damned with that title—has been of fundamental importance to my constituency over the years. In closing, I quote from an article by Alan Hamilton


in The Times of August 21st last. He said:
Even the most nationalised of port authorities, the British Transport Docks Board, is no friend of Mr. Mulley. Sir Humphrey Browne, BTDB Chairman, is a strong believer in a mixed economy, and has said that he welcomes the competition of the private ports. He is in a position to be of such a mind, as his board shared with the British Steel Corporation the food fortune of being the only profitable nationalised industry last year.
I condemn the Bill. I regard it as superfluous, harmful and hurtful. I only hope that we shall vote it down tonight, and that, in addition, Sir Humphrey Browne will have cause to reflect on the wisdom of the words that he used, as given by the writer of that article. Instead of having £4¼ million of Treasury money at 3·61 per cent., or whatever it was, absorbed in this venture, why not repay it to the Chancellor of the Exchequer and help him with the funding of the National Debt?

Mr. Deputy Speaker: Before calling the next hon. Gentleman I remind the House—it is self-evident—that the Bill relates only to Felixstowe Docks. Although the Chair has allowed some latitude in the arguments advanced for and against the measure before the House, we must not now allow the debate to develop into a general debate on nationalisation. The Chair would deprecate it if that should occur.

8.5 p.m.

Mr. Ken Weetch: I have a number of reasons for speaking in this debate on the British Transport Docks (Felixstowe) Bill. I am interested, first, in the general principles of the argument. I support the purpose of the Bill, which is to implement an agreement freely arrived at between the board of management of the Felixstowe Dock and Railway Company and the British Transport Docks Board.
Secondly, I have a close constituency interest, because some of my constituents work in the port and have long done so. For a considerable period they have been in touch with me over a varied range of matters, and particularly of late they have been concerned with the question now before the House.
My third reason is more important than either of the first two. The efficiency and prosperity of the port of Felixstowe is of very vital importance to the

economic development of this part of East Anglia. I hold that principle to be of the first importance, especially in view the rapidly developing threat from Europe.
I am very sorry that the dispute has degenerated into a battle along party lines.

Mr. Stainton: Who started it?

Mr. Weetch: I shall answer that in a moment. It need not have happened in this way. I am also very sorry that so much of the language has been emotive. A report in The Guardian of 27th November last described Felixstowe as the white hope of capitalism in East Anglia.
It has also been described as the jewel in the crown of free enterprise. I have read remarks about resisting the stranglehold of the State. All this language does the essential argument no good at all. Much of the jargon of the Right and Left is totally beyond my political thinking. I want to consider in the debate what is best as a practical proposition for the future of the port.
I submit that the aims and objects of the exercise must be to ensure an efficient and prosperous future for the port of Felixstowe for those who trade in it, for those who work in it and for those, including myself, who want to see the port expand and develop. That, I think, is the crux of the whole argument from start to finish. These are the thoughts which are uppermost in my mind in arguing in this debate in support of the Bill.
The main arguments in outline were put by my hon. Friend the Member for Leicester, East (Mr. Bradley) when he opened the debate. The main lines of his analysis, I submit, are absolutely correct. But let us first clear the ground. The Bill is being promoted on the basis of an agreement freely reached last November between the management of the Felixstowe Dock and Railway Company and the British Transport Docks Board. That is an agreement still honoured by the board at Felixstowe port, which, even under the heavy pressure of the last few months, has not gone back on its word. I saw no official announcement before I came into the debate which suggested anything to the contrary. That is my most recent advice.

Mr. Eldon Griffiths: This is material to the deliberations of this House on the Bill. I make no editorial points. The hon. Gentleman should know of the announcement made this evening from the directors of Felixstowe port. It says:
Your directors therefore recommend that those ordinary stockholders who have not already accepted the offer by European Ferries should do so".
They say also that
Individual members of your Board are now free to accept the offer, and will be doing so.
That has changed the situation completely from what the hon. Gentleman has said.

Mr. Weetch: The hon. Gentleman is telling me nothing that I did not know before. I always knew that the directors of the Company would recommend the sale of its shares. That is a natural commercial operation, as I understand it. But my latest information is, as I have said, that the board of the Felixstowe Dock and Railway Company is still on record as being of that view and has not gone back on its word. If there is later information to contradict what I say, I shall give in to it. At the moment, however, I stand by what I have said.
The point I wanted to make is that this is no Draconian manoeuvre. It was an agreement arrived at by a willing buyer with a willing seller, and this was the judgment reached by the board of management of the port—a board of management which, I agree with the hon. Member for Sudbury and Woodbridge (Mr. Stainton), knows its business.

Mr. F. A. Burden: Is not it a fact that the directors do not own the Company? The shareholders own it. All that the directors can do is to put before the shareholders the offer and get their views. If a better one comes up, it is the duty of the directors to give the shareholders, who own the Company, the opportunity to express their views.

Mr. Weetch: Indeed, and subsequently they may do that. I am talking about the factual situation as it is at the moment.
In support of what I say, let me quote some words of the Chairman of the Felixstowe Dock and Railway Company, Mr. Gordon Parker. In an article entitled
Felixstowe Docks opts to desert capitalism".

Mr. Parker described himself as
a self-confessed bastion of free enterprise.
He would not have advocated any such agreement with the British Transport Docks Board had it not been in the best interests of the port of Felixstowe itself, he said. That is on record. Those are the words of a "bastion of free enterprise".
Mr. Parker went on to underline the point by saying:
You must look at the reality of the situation. You must not allow your sentiments to cloud your judgment".
I suggest that that is a suitable theme for this debate. In fact, I might suggest to the free enterprise thinkers on the Opposition Benches that when this agreement was reached by this apostle of free enterprise with the British Transport Docks Board, it may be that he was guided in making it by the hidden hand of Adam Smith. We never know in these matters. We can go only by what we read in a facsimile report going back to last November.
If the Bill is passed, the agreement will be implemented, with very substantial advantages for the port of Felixstowe. In my view, the practical arguments—I am advancing practical arguments at every stage, if I can—are overwhelming. The first is that the British Transport Docks Board has the resources, arising from the commercial profitability of its operations, to provide a sound economic future for the port. It is quite unscrupulous to suggest that it will mean a charge on public expenditure, because the Docks Board has financed all its expansion since 1972 from retained profits arising out of the efficiency of its operations. That is the plain commercial fact of this matter. In fact, the British Transport Docks Board, from start to finish, is acting in a commercially responsible way. I hope that that will appeal to Opposition Members.

Mr. Robert Cooke: The hon. Gentleman will recall that the port of Bristol, which is municipally owned, was prevented from expanding so that his friends in the British Transport Docks Board could make money on the other side of the Bristol Channel.

Mr. Weetch: I cannot comment on that intervention because it is totally irrelevant to the issue under discussion.
The second point that I make is the crucial one in this argument. It is that the British Transport Docks Board is not a shipping company. It is an organisation which can bring enormous experience and expertise to bear on the practical problems of the port of Felixstowe and its future for the benefit of all concerned. It has a wealth of experience, and it has the overwhelming advantage of group strength combined with decentralised management and local port autonomy in day-to-day operational matters. The Docks Board can muster the experience of Britain's largest port authority, stretching from the Humber to Southampton and to the ports of South Wales and elsewhere.
I have heard it argued that the Docks Board's overall policies might conflict with the aim of expanding Felixstowe. Frankly, this is rubbish. I have heard it agreed that, just because the British Transport Docks Board has an overall policy, this is likely to limit the expansion of Felixstowe in some way. Personally, I am glad to see that the Board has some overall policy and that it can bring such expertise and experience to bear as part of the total framework of its operations.
The fact is that the British Transport Docks Board has demonstrated the success of its policy of decentralised management and commercial expansion. I have sought its advice and I am assured that Felixstowe will be told by the British Transport Docks Board to go out for more business and to be competitive. As far as I am concerned, that is fair enough.
It is my view that the port of Felixstowe, for whose future I care a great deal in practical terms, would be in good hands with the British Transport Docks Board. If I did not believe that, I should not be participating in this debate.
But what of the alternative? Here we have a guardian angel waiting in the wings to bring sweetness and light to the port of Felixstowe in the form of free enterprise. Let us examine that for a moment. If we look at the alternative, I see first of all that the whole of this operation has been jeopardised by this counter-proposal, which has led to uncertainty, delay and procrastination when what we should be doing is pushing

ahead with constructive plans for the future.
If the counter-proposal were successful, we should have a situation where the port was controlled by one of the users. I suggest that that is a very unhealthy situation. We have had an example of that in Liverpool.

Mr. Eddie Loyden: Is my hon. Friend aware that during the period when the merchant princes and the port users made up the composition of the Mersey Docks and Harbour Board they ran the place into bankruptcy in 1970 in their own interests by keeping charges artificially low because they were the people paying them?

Mr. Weetch: I thank my hon. Friend for reinforcing my point. He has more knowledge of the port of Liverpool than I have. My general point, however, is that it is an unhealthy situation when control of a port devolves into the hands of a large user. It is an unhealthy situation in principle.

Mr. Julian Ridsdale: Will the hon. Gentleman give way?

Mr. Weetch: No. I have not much time.

Mr. Ridsdale: The hon. Gentleman appears willing to give way to his hon. Friends.

Mr. Weetch: Yes, but the intervention by my hon. Friend the Member for Liverpool, Garston (Mr. Loyden) was the first from my side of the House.
I want now to touch briefly on labour relations at the port of Felixstowe and to say a little about certain events which have occurred concerning labour relations in the past week. I am sure most hon. Members will agree with me when I say that the basis of prosperity of any port is good labour relations and that without good communication and a spirit of understanding, in addition to good working machinery, no port will prosper. As a general principle, I think that that is defensible in any terms. I agree with the hon. Member for Sudbury and Wood-bridge that without a shadow of doubt labour relations at the port of Felixstowe have been very good. I go further and say that both management and unions at the port can take very great credit for this substantial performance over the years.
What of the future? Everyone would agree that the record I have just described must continue. I firmly believe that this record of good relations will be maintained by the Docks Board and that there is every precedent for that assertion. Labour relations at British Transport Docks Board ports have, for an industry plagued with the difficult problems of technical change and the legacies of the past, been above average and high in quality. As my hon. Friend the Member for Leicester, East said, that point was submitted by the TUC to the Select Committee on Nationalised Industries. Although the TUC admitted that there had been difficulties in a difficult industry, it submitted that the overall pattern in the British Transport Docks Board was above the average and that it was good in comparative terms.
We come now to the 64-dollar question. What about the alternative of European Ferries, which is poised waiting in the wings? Last Saturday night I was asked to go to an emergency meeting in my constituency to meet the National Union of Seamen working for European Ferries. They told me about the dissatisfaction that exists throughout that organisation about labour relations. One of them, a representative on the Felixstowe Port Committee, described labour relations in European Ferries as an archaic, paternalistic, monolithic and appalling framework of consultation.
A substantial strike was narrowly averted this week at European Ferries at the Felixstowe Docks. It arose because two ships were withdrawn without consultation. The whole situation hit the men like a bombshell. They were due to discuss washing machines at a meeting, but then they were told that two ships were to be withdrawn, affecting redundancy. This was a matter in which there should have been close and detailed consultation, but there was not. The trouble brew up, but luckily for everyone the matter was settled. If it had not been, there could have been considerable damage.
When the strike was settled, two statements were issued. The National Union of Seamen said that in view of European Ferries management's offer of no redundancies and its offer of discussions on consultation machinery, the union would

advise its members to withdraw the dispute notice. Hon. Members should note the offer of consultation machinery. If the company is going to bring all these reforms to the docks, I must say that it has not done much so far.
I now quote from a letter from the Merchant Navy Officers' Association. It recommended no participation in the dispute and said:
We must stress that failing a marked improvement in the matter of communications and consultations, we shall be forced to reconsider the advice given to our fellow officers.
That is a striking comment on industrial relations in European Ferries. That was the moderate element speaking, and it spoke with some knowledge.
The crucially important point is that ominously, in the critical area of labour relations, European Ferries wishes to establish its control as the alternative to the British Transport Docks Board. It does not have a tradition of good labour relations and will not bring that to the port of Felixstowe. It has been emphasised to me that the incident in which a damaging strike was narrowly averted was symptomatic of general dissatisfaction within the European Ferries organisation. The British Transport Docks Board has the labour relations and expertise to continue the traditions of good industrial relations of which the hon. Member for Sudbury and Woodbridge spoke.
I believe that after a decision freely reached by the board of management of Felixstowe Docks and Railway Company to enter into an agreement with the British Transport Docks Board, the counter-bid by European Ferries has created uncertainty and instability. This champion of so-called free enterprise, European Ferries, is playing political ducks and drakes with the future of the port. Its intervention was not only irresponsible but was thoroughly disreputable and unscrupulous.
I shall now quote from page 5 of the offer on behalf of European Ferries by Warburg and Co. Limited, which states:
Provided that the British Transport Docks (Felixstowe) Bill in its original or any modified form (' the Bill ') currently before Parliament does not receive the Royal Assent, Ordinary Stockholders who accept the offer will be paid an additional amount of 15p


in cash for each Ordinary Stock unit of Felixstowe Dock within 21 days of the Bill being withdrawn or otherwise lapsing.
Let us get to the root of that. It means that if the Bill falls each shareholder will receive another 15p apiece. I stress that I am not making any personal imputation. I have a high respect for the hon. Member for Sudbury and Woodbridge, and I wish to scrub any such thought from the minds of hon. Members. It could well have been the case and can be interpreted that any hon. Member was being given a financial inducement to take a certain political course of action. That is the principle at stake in this issue.

Mr. Ridsdale: On a point of order, Mr. Deputy Speaker. Is the hon. Member casting an aspersion on all hon. Members of the House?

Mr. Weetch: Certainly not.

Mr. Burden: The hon. Gentleman took the view that this could be considered as an inducement to hon. Members to throw out the Bill because they would receive financial gain.

Mr. Deputy Speaker (Mr. Bryant God-man Irvine): Order. If that was what the hon. Gentleman said, I am sure that he will withdraw.

Mr. Weetch: I shall not alter one semicolon, Mr. Deputy Speaker, because the facts are on record.

Mr. Burden: On a point of order, Mr. Deputy Speaker. I am sorry to pursue the matter, but it is completely wrong for the hon. Gentleman to suggest that hon. Members on the Opposition Benches can be bribed to vote in a certain way on a Bill.

Mr. Deputy Speaker: I have indicated to the hon. Gentleman that if he suggested that there is any question of bribery he should withdraw that suggestion.

Mr. Weetch: There is no question of my suggesting bribery, Mr. Deputy Speaker. All I am saying is that the 15p above the odds if the Bill falls can be construed as a financial inducement from European Ferries. The facts are on record, and I have them in front of me.

Mr. Stainton: On a point of order, Mr. Deputy Speaker. I understand the purport

of the word "construe" to be "construe to some purpose". The hon. Gentleman must finish his sentence.

Mr. Skinner: Further to that point of order, Mr. Deputy Speaker. What my hon. Friend the Member for Ipswich (Mr Weetch) has been trying to tell the House is that an offer has been made by European Ferries that if the Bill s thrown out 15p will be added to the amount paid for the shares. On the basis that there may well be hon. Members who would gain a financial advantage if the Bill were thrown out, my hon. Friend is saying "If the cap fits, wear it".

Mr. Deputy Speaker: Order. I am sure that if there are any hon. Members in that situation they will declare their interest.

Mr. Weetch: When I read that part of the printed offer, I took the advice of senior Members as to whether I should raise it as a question of Privilege. I decided on balance not to do so. But I am certainly in order in raising the matter in this debate. The word I used was "disreputable", and disreputable it is.
I have already said that I give the Bill support so that a freely-reached decision may be implemented. I know that the argument will suggest itself to all hon. Members that the Bill represents the honouring of an agreement freely reached. If Opposition Members defeat the Bill, they must realise that they will increase the period of uncertainty and that a large question mark will hang over the future of Felixstowe.
There is talk about free enterprise and the shareholders. The shares in the Felixstowe port are not now held by little men, the yeoman of East Anglia. They are held by a great juggernaut. The situation has greatly altered.
I am a strong supporter of the Bill on practical and, I hope, hard-headed grounds. I hope that its provisions come to pass. If they do not, because of doctrinaire opposition, there must be uncertainty for a long time about the port of Felixstowe.

8.33 p.m.

Mr. Michael Clark Hutchison: My interest in the Bill stems from the fact that I was at


Trinity College, Cambridge, with which I have kept in touch over the years. Hon. Members may laugh, but I owe a great debt to the College. Trinity takes no partisan or political view of the matter before us, but it is deeply concerned, because it owns land in the area. That lands, most of it agricultural, was acquired many years ago. It provides income that is used entirely for educational purposes. No individual is involved, and no individual receives direct money benefit from the land.
A number of years ago, 100 acres belonging to Trinity were leased to the Dock Company for development- More recently, another 200 acres have been developed by the College, with excellent roads, drainage and other services. The area has been made available to commercial firms using the docks. There are now office blocks, considerable warehousing facilities, cold stores, a lorry park, a hotel, and other facilities, which have all contributed to the efficiency and success of the docks and the well-being of the people in the town. Relationships all round have been excellent.
Trinity does not take a political line, but it is concerned that a change of ownership could have adverse affects. The British Transport Docks Board already controls about 19 ports, including Hull and Southampton. If it acquired Felixstowe it might not be quite so single-minded in development there as those responsible have been in the past. Any falling off in use and efficiency at Felixstowe would, of course, affect for the worse the prosperity of firms there and individuals in the area for whom Trinity feels some responsibility, as a landlord.
The second and perhaps more important question is that of education. I mentioned that no moneys from the area go to private individuals; all the money goes for educational purposes. Nor does the College keep all the revenue for itself. Under an agreement operating with Cambridge University, certain of the wealthier colleges pay into a pool to build up the endowments of less well-off colleges. About £250,000 has been involved in this system in the past few years and it has been very helpful to the women's colleges.
In addition, Trinity had a large stake in the founding of Darwin College and through its own resources it has estab-

lished the Cambridge Science Park—a 30-acre area on the outskirts of the city for special science-based industry working in close touch with the university science departments. I am not a scientist, but I am very glad to be able to tell the House that among Nobel Prize winners in science, 20 have been at Trinity College—just the one college—compared with 21 for the whole of France and 17 for Belgium, Holland and Italy combined. I believe that we would all agree that this is an outstanding and generous record, which should, if possible, be continued.
In these days, when money is not so readily available for education, it seems to me that no steps should be taken which could lessen these contributions—but that could happen if Felixstowe does not continue to prosper.
Trinity probably would have preferred it if the Felixstowe Dock and Railway Company could have continued as before, because its relationship with the Company was excellent, but in the new circumstances of today the College feels that Felixstowe would be better in the hands of a one-port owner than in the hands of a multi-port owner. That would ensure more competition, better development, greater concentration on a single entity, and a steady income. Dispersal of effort would be avoided. As we all know, size is not everything, and it very often leads to inefficiency. Small, single entities can often prove more efficient. For all these reasons, Trinity College petitioned against the Bill, and in my humble view it was right to do so.

8.39 p.m.

The Minister for Transport (Dr. John Gilbert): It may be helpful to the House if I intervene at this stage of the debate not to reply in detail to it but to indicate very briefly the Government's attitude to the Bill. This is, of course, a Private Bill; it is not a Government measure. The Government are, however, sympathetic to the objectives of the Bill, for the reasons I shall explain, and I very much hope the House will give it a Second Reading tonight. My hon. Friend the Member for Leicester, East (Mr. Bradley) has given the House a full and eloquent explanation of the background to the Bill and its detailed provisions, and it would not be appropriate for me to go


over all the ground again. I should, however, re-emphasise that the Bill derives from an agreement between the British Transport Docks Board and a Felixstowe company—a freely-negotiated commercial agreement.
I make clear also that the Government were in no way the instigators of the agreement. So far as I am aware, the Docks Board and Felixstowe came together entirely of their own volition. It was a love match, and not an arranged wedding. The Docks Board properly informed me of its intention at an early stage in the negotiations. I made clear that it would have to win the consent of Felixstowe by its own efforts but that, provided agreement could be reached on reasonable terms, I could see no objection to its proceeding with the matter.
Last October, the Docks Board reported that it had made the proposal to acquire the company at an agreed price of 150p a share. After due considerations, I told it that the Government were prepared to bless the union, and consented to the introduction of the necessary Private Bill. The Government's reasons for supporting the Bill were, and are, straightforward.
In the first place, it seems to us that the take-over makes good sense for both parties. The Docks Board will acquire a flourishing East Coast port of particular strength in short sea trades, which will provide a useful addition to its ports of Southampton and Hull. For its part. Felixstowe will gain the advantage of a merger with a larger organisation with a record of success and one which enjoys the financial strength and experience to undertake further developments at Felixstowe, as they are needed.

Mr. Burden: Does the Minister agree that it is not the directors but the shareholders who own the Company? Was this offer put to the shareholders? Did they accept it? If not, why not? The board of the Company alone could not accept. If a better offer was put before the shareholders as the owners of the company, had they not the right to accept that offer rather than a lower one, which was apparently negotiated without their being consulted by the board?

Dr. Gilbert: I have no quarrel with the proposition that the shareholders of Felixstowe are entitled to accept a higher offer. The consequences for European Ferries are another matter, which no doubt were taken into account by the board of that institution when it made its offer.
For its part, we see Felixstowe gaining the advantage of a merger with a much larger organisation which has a record of success and financial strength and experience to undertake further developments at Felixstowe, which is one of the matters which, in this debate, have weighed clearly in the minds of hon. Members. The original price was freely negotiated between the parties, and seemed reasonable in the circumstances.
However, apart from these immediate advantages to both the Docks Board and Felixstowe, the Government support the Bill because this merger would fit in very well with our general plans for reorganisation of the ports industry. I am still considering the precise shape that this reorganisation should take, in the fight of reactions to the two consultative documents issued by my predecessor. One essential objective will certainly be to bring commercially-owned ports into public ownership, and the Docks Board's acquisition of Felixstowe would therefore be a step in the right direction.
As I have said, European Ferries was perfectly entitled to make the counter-bid that it has made. I understand that a large number of Felixstowe shareholders have now accepted its offer. European Ferries will soon, therefore, be in effective control of the Company, and it will presumably be seeking withdrawal or defeat of the Bill. I say "presumably", because I do not wish to speculate as to its motives in making the counter-bid.
The Docks Board, however, continues to believe that it is right to press ahead with the Bill. The basic question that we have to consider, therefore, is whether it will be better for the port of Felixstowe to be owned and operated by the Docks Board or by European Ferries. To this, I believe that the answer must be "the Docks Board". The Board has immense experience in the running of ports and, as I have said, a


very long record of success both in financial terms and in labour relations. In recent years, it has made steady progress in financial terms, in its share of United Kingdom traffic, and in the quality of its services.
I am confident that, quite apart from political considerations, which I am happy to proclaim from this Box, the Docks Board would be the better organisation to own and operate Felixstowe. When, in addition, we take account of the Government's intended reorganisation of the ports industry, it must surely make better sense for Felixstowe to join now with the Docks Board, rather than to go it alone with European Ferries for a year or two before it is in any case taken into public ownership.
In conclusion, I should like to emphasise once again that this is a Bill to ratify a contractual agreement, freely entered into by the Docks Board and Felixstowe. Part of the agreement was that the Docks Board should bring forward the Bill now before us and should
use their best endeavours to secure its enactment
For part, the Felixstowe Company agreed to
aid and assist the Board in the promotion of the Bill".
The intervention by European Ferries does not alter this agreement. European Ferries knew the terms of the agreement before it made its offer, and, as owners of Felixstowe, must, of course, inherit the obligations of the Felixstowe Company to carry out its part of the agreement. I suggest that those who oppose the Bill are really trying to use Parliament to secure the breach of a binding agreement. I am sure that Parliament would wish to be very wary of using its powers to overrule a private agreement in this way, and since in the present case there are strong grounds of public interest for upholding the agreement, I strongly urge the House to give the Bill a Second Reading tonight.

8.47 p.m.

Mr. Norman Fowler: I shall intervene briefly in the debate. I had intended to be brief in any event. The Minister's speech allows me to be even more so, because there

was nothing in it to persuade anyone who had not already made up his mind.
There is general agreement on one point; the growth of the Felixstowe Company has been an outstanding postwar success story. When Gordon Parker took over in Felixstowe in 1951 the dock basin had silted up, the piers were damaged, and the equipment and warehouses were in disrepair. Recovery was the result of combined efforts of management and staff—and I emphasise "staff". About two weeks ago I went to Felixstowe and, like any visitor, was struck by the good relations that exist. They are an example to the whole industry, and they have played a significant part in the success of the port. No one can dispute that success. Whatever measure is used, the result is the same. In 1957 the port handled 82,000 tonnes of cargo. Last year it handled 4·2 million tonnes. In 1963, 1,200 vessels arrived at the port. Last year the number was 4,500. When the hon. Member for Leicester, East (Mr. Bradley) says that Felixstowe is too important to be left in private hands, he may reflect that this is exactly how its development was achieved.
Trade has expanded sharply. Felixstowe has earned for itself a world-wide reputation for efficiency and reliability, as evidenced by the number of users who have transferred there. They include the United States Line, Sea-Land Container-ships, and American Export Lines—three big companies in the United States. The net result has been that the increased trade and profits earned have lead to a dramatic rise in the number of people employed in Felixstowe. When Gordon Parker took over in 1957 the labour force was around a dozen. Today the company alone employs 1,150 people directly, while the port users provide hundreds of additional jobs. That is the true background to the Bill.
A great deal has been made that in the original negotiations last autumn the board of Felixstowe recommended acceptance of the Dock Board's offer. We are told that this was a willing buyer—willing seller situation. That argument, however, conveniently ignores one crucial point. Felixstowe, like most other companies in this country, was hit by the recession. Had it been any other private sector company with the same profit record


there would have been no great problem, but, of course, Felixstowe faced the prospect of nationalisation, and that introduced serious uncertainty.
Gordon Parker has made no secret of the effect that this threat had. When he circulated shareholders on 30th October, he specifically mentioned the threat
of being taken into public ownership in an unspecified way and at an unspecified date".
He added that
unless Felixstowe Dock's future is clarified it is now faced with increasing uncertainty".
That is the true background. At that stage the board of Felixstowe Docks and, indeed, the shareholders, neither saw nor had any alternative.
But that position changed dramatically two months later, when European Ferries put in its counter-bid. The result is that, whatever the position may have been last November, no one can seriously suggest that today we are dealing with a willing buyer-willing seller situation. The British Transport Docks Board certainly remains a willing buyer, but the vast majority of those most closely affected by the proposed take-over do not want it. I suggest that their views should be treated as overriding in this debate and in taking a decision on the Bill. The House should follow their guidance.
The shareholders could hardly have made their views clearer, as has been said. The people and the institutions who have invested money in Felixstowe have voted overwhelmingly in favour of the counter-bid, and therefore against the Bill.
We have not heard much about the port users. Many users at Felixstowe are seriously concerned about the effect of the Bill. They have been accustomed to local management and local decision-making, and to the port's being run by an independent company. I gather that the reaction from customers has been adverse. Indeed, some say that they will transfer their business if the Bill goes through. Therefore, to put it at its most moderate, there is no evident enthusiasm for the Bill among the port's users.
What about the people who work there? The local branch of the Transport and General Workers' Union says that it will work with whichever party gains control. However, many workers make

no secret of the fact that they would prefer the port to remain independent. Again, to put it at its most moderate, there is no pressure to have the port taken over in the way proposed in the Bill.
Lastly, there is the view of Trinity College. If hon. Gentlemen opposite believe that Trinity College takes an unworldly, academic view, I suggest they arrange to meet the bursar, Dr. Bradfield. Trinity's interest is in the revenue from the warehouse estate adjoining the dock. It is interested in seeing Felixstowe prosper and develop. That is Trinity's concern, and it, too, is against the Bill.

Mr. Bradley: Will the hon. Gentleman explain why, in its petition, Trinity College says
it is no part of your petitioners' "—
that is the College's—
case that the Board 
—that is, the British Transport Docks Board—
should not acquire an interest in the port of Felixstowe in the manner proposed in the Bill"?

Mr. Fowler: I do not think that the hon. Gentleman has grasped the point that I was making. There is no doubt about what Trinity College wants. That has been published, and can be confirmed by the hon. Gentleman in minutes. Trinity College is against the Bill. Of that there is absolutely no question.

Mr. Stainton: The Trinity College petition was laid prior to the offer emerging from European Ferries.

Mr. Fowler: I am grateful to my hon. Friend for that information.
There is hardly a voice raised in support of the Bill by the people most closely concerned with the port of Felixstowe, yet the effect of the Bill—this point should be emphasised—is to defeat their will. This is not an enabling Bill. If we give the Bill a Second Reading we shall effectively be giving control of Felixstowe to the British Transport Docks Board. I cannot see how, in all honesty, we can give a Second Reading to a Bill that defeats the will of the shareholders and those most closely connected with the successful operation of Felixstowe.
It is a common view in the House that Parliament should rely on the advice of the people on the ground. We are being


asked here not only to ignore their advice but to override their view that such a step simply cannot be justified. We are left with arguments that seek to denigrate European Ferries. I regret the introduction of those arguments, particularly the way in which they were used by the hon. Member for Ipswich (Mr. Weetch). If there is anything disreputable about this debate it is the kind of attack that he made on European Ferries.
Although I oppose the Bill, it is no part of my case to claim that the BTDB is incompetent or yet another candidate for public subsidy. It makes profits, and men like Sir Humphrey Browne and Keith Stuart are shrewd and profit-oriented business men. But I would have hoped that Labour Members would show the same fairness in their view of European Ferries.
Some might take the view that a company which has built itself up from 1963, when it had 7 per cent. of cross-Channel trade, to its present position, when it has 50 per cent., is precisely the kind of company that this country needs. Some might take the trouble to check with the port authorities at Dover, where European Ferries is one of the biggest users. I visited Dover two weeks ago. The reputation of European Ferries stands high there because it has brought extra trade and employment to the town.
Some might think it more appropriate, rather than attacking the labour relations record of European Ferries, which is in fact very good, to remember that the company now provides employment for over 3,500 people, whereas 10 years ago it employed only 300. Nor are the other arguments used against the company any more accurate.
It is claimed that it would discriminate against other users. Yet the other users at Felixstowe do not take that view, and experience at Larne shows entirely the opposite. European Ferries bought Larne Harbour Limited in 1973. At that time the Scottish arm of British Rail's Sealink was the largest user, and it has continued its use without discrimination. In addition, a subsidiary of P & O Shipping, one of European Ferries' biggest competitors, has been encouraged in, while in the same period that Larne has developed profits have increased and the work force has risen by 40 per cent.
It is claimed that European Ferries does not have the necessary financial strength to develop Felixstowe, yet in the last two years it has financed a shipbuilding programme of £50 million. The most immediate need at Felixstowe is likely to be a deep-water channel to handle the large container ships, at a cost of £1½ million. Therefore, there seems to be nothing in the record of European Ferries to justify the kind of criticism that we have heard tonight and there is a great deal which deserves our praise.
We are told in the Press this morning that European Ferries has "very limited experience" of port management. Exactly the same argument could have been used against Gordon Parker 25 years ago when he started to redevelop Felixstowe. It could be used against virtually every other innovator in the country.
What is certain is that there is nothing to justify the House seeking to intervene and to impose its will, as would be the effect of the Bill. I have said that I do not wish to attack the British Transport Docks Board. It already runs 19 ports and has 25 per cent3, of the market. If the Bill goes through, it will have 30 per cent. If Felixstowe comes under the Board's control, the biggest of the private enterprise companies goes too. The public interest is better served if Felixstowe remains independent and in competition. The Docks Board says that it will seek to preserve the independence of the Felixstowe operation. That independence and that local management, which have so much explained Felixstowe's success, are better preserved outside the BTDB structure.
What we are in effect being asked to do tonight is to intervene and to defeat the expressed wish of the shareholders and to ignore the equally clear views of those who know most about Felixstowe and depend most upon its prosperity. I do not believe that we in this House would be justified in taking that course. In my view, the interests of Felixstowe port and its customers require that the House should reject the Bill

9.0 p.m.

Mr. John Prescott: As the speech of the hon. Member for Sutton Coldfield (Mr. Fowler) has shown, and as has been reflected in speeches from both sides of the House, it


is inevitable that the differences between us on this matter, however we view Felixstowe, tend to be influenced by our political attitudes on how we should reorganise this important industry. It is not necessarily an ideological battle, but there are very strong differences between various people in the House reflecting differing political philosophies as to how we reorganise our very important ports industry. When one takes into account the circumstances and the ingredients of the events involved here, one appreciates that it is inevitable that these differences have arisen tonight and that the debate would follow in the way I have described.
Felixstowe is a very important and growing port. Those who have taken a considerable interest in port development and the future of our ports have noticed this port in particular. There are a number of reasons for that. We must give credit where it is due. There has been a great deal of entrepreneurial ability, good management and good labour relations. Felixstowe also has good deep water as well. These are factors that have played a significant part in the development of the port.
Felixstowe has become a thriving port. It is a private port and thus has connotations in our general debate in regard to the differences between the parties. It has been held up almost as a private enterprise jewel, particularly in regard to the entrepreneurial judgment that has built up the port. However, people do not seem to draw the same conclusion when it comes to the fact that those who exercised the entrepreneurial judgment to give it this force of growth are the same people as are recommending that the British Transport Docks Board should be given the ownership of the port in order to continue with its growth. That is the judgment of the one person who has been personally identified in the Press and by the Opposition Benches on occasions in ports debates. It is clear that it is his judgment today that the British Transport Docks Board deal should go through despite the offer now made by European Ferries.
Perhaps I may add that an awful lot has been said about shareholders and about the management team. Whatever decision the team comes to, the final decision lies with the shareholders. How-

ever, it was not the shareholders who gave growth to the port, as has been amply illustrated this evening. It was this entrepreneurial ability. Therefore, there is a contradiction and a conflict in this matter.

Mr. Burden: With great respect to the hon. Member, may I say that he should recognise that, no matter how good an entrepreneur a man may be, in order to develop a port such as Felixstowe he has to have the backing of finance, without which he can do nothing?

Mr. Prescott: An awful lot of companies have had the backing of finance but have been disasters—both private and public companies. I do not know why hon. Members are shaking their heads. If they had been present during previous port debates, they would know that much play has been made about entrepreneurial ability by one particular person. All right. He required labour and capital in order to make it a successful enterprise. That should come as no surprise. But this man has been the very key to Felixstowe's success, and this has been illustrated in our debates. It is his continued judgment that the port should now be given over to the Board.
However, a private organisation has entered into the arena at a late date offering a better deal. That is the essential ingredient in the considerable political disagreement in the debate. Clearly, the intervention was somewhat late. As evidenced by the offer of European Ferries, the delay was able to arise particularly because of the requirements of the Transport Act 1962 and the delay enforced by the Prayer against the Bill put down by a number of Opposition Members.
I do not flinch from any conflict on these matters. This is not only an ideological battle, because obviously there is a fundamental difference of view between the two sides as to how to deal with this important port industry. We are dealing not just with Felixstowe or even with the ports industry but with the whole transport question.
When we consider the subject of the ports, we must also consider the subject of infrastructure such as the roads comlex. As soon as cargo begins to grow in ports like Felixstowe, we must ensure


that we provide good communications to assist development of that port and others. However, we as politicians must face the problem of allocating resources and of setting the priorities between the ports.
It is clear that the ports have been plagued with considerable problems. Felixstowe has been held up to the House as an example in its handling of labour relations. We all appreciate that the Rochdale and Devlin Reports and various Commissions have examined the problems of the industry. We also appreciate that the industry has lacked investment. That argument is true of both the public and private port concerns.
Various Governments have produced differing policies. The Conservative Government tried to bring financial disciplines to bear. They decreed that the ports should pay their way and they laid down financial targets at a high level, thus forcing the ports to put up their rates. In that process many of the ports were put to considerable disadvantage and traffic was diverted. A number of reports have examined the problems in various areas, such as the Humber, and have tried to analyse the situation thrown up by dock strikes and other difficulties in the industry. Certainly those reports contained recommendations to the effect that the Government had to do something in developing small wharves and in certain cases in siphoning off traffic.
Some large ports face problems flowing from the return on capital. Obviously the problems related to an investment of £20 million are much greater than those related to an investment in a small wharf involving, say, £30,000—a wharf which, because of that very fact, can charge lower rates. Those arguments are separate from the question of labour relations and whether they are good in Felixstowe or bad in Hull or wherever it may be. We must try to solve the problem, and in setting our priorities we must look at the existing traffic as it is dispersed throughout the ports.
Obviously we have reached the conclusion that there needs to be more control over the development of traffic so that one port should not be played off against another. We must remember that the

State is often called upon to pour millions of pounds of public money into various ports and wharves. This is a problem that Parliament must decide. Felixstowe highlights that problem in a nutshell.
I believe that the previous Labour Government were mistaken in not including Felixstowe within their nationalisation plans. We have now recognised that mistake and are awaiting proposals that will include that port within our plans.
The main issue before us is to decide whether Felixstowe, which is undoubtedly an important port, should be allowed to develop under the British Transport Docks Board or European Ferries. A number of arguments have been deployed against both organisations. We must now examine the problem and decide which organisation represents the best bidder in the interests not only of the port of Felixstowe but of the development of the ports industry as a whole. There is the nationalised body, the British Transport Docks Board, which owns 19 ports, and there is European Ferries, which owns one or two ports and has experience in shipping.
I was a seaman for 10 years. I suppose I should declare an interest. I shall not be paid, but it seems to be a night for declaring interests. I never sailed on Townsend Ferries, which is a part of European Ferries, but I know something of the history of the company and the development of its shipping activities. We cannot yet measure its ports activities because it has only just taken over some ports, but it certainly had considerable success in expanding its shipping fleet.
When Mr. Wickenden gave evidence to the Select Committee, he told us why the company had been able to expand at such a tremendous rate. He said that due to tax allowances and free depreciation for shipping, his company had not paid any taxes in the past few years. I asked whether this had assisted the massive capital development which had enabled his company to have much newer ships than its major competitor, British Rail. He replied "Yes, without doubt." Unfortunately, although British shipping had made money, British Rail had made a loss and British shipping was not able to enjoy the same tax advantages as the private company.

Mr. Peter Rees: Will the hon. Gentleman confirm that in his cross-examination of Mr. Wickenden he complimented the company on its labour relations?

Mr. Prescott: That is quite right. When I asked Mr. Wickenden about labour relations, we were having certain problems with the nationalised Board in Dover and he gave us his view. Naturally, I am interested in why labour relations are good in some areas and bad in others, but I should point out that labour relations can be good in one place and bad in another even though the men are all employed by the same company. There are many factors affecting labour relations.
The hon. Member for Sutton Cold-field spoke about the great expanding private sector. There are a number of reasons for this which the hon. Gentleman could read in the Select Committee's Report, together with our recommendations.
I am surprised that the Opposition are not concerned that a single shipper has control of Felixstowe. I should have thought that this would concern them a great deal. When a nationalised industry owns a port and the shipping, the Conservatives criticise the monopoly aspect of it, but there is no such criticism of the private sector.
The port of Liverpool collapsed when it was deliberately put into bankruptcy by the last Government. The money which many people had invested in shares was thrown away. The owners who controlled that port refused to put up freight charges as demanded by the Government. That was what destroyed the port.
My hon. Friend the Member for Ips-which (Mr. Weetch) has referred to the question of labour relations at Felixstowe, and the members of my union are extremely concerned about the situation there. I do not know whether those members are the politically motivated onces, but this description does not apply to the union's officers and they share the concern about the handling of labour relations. The company did not call the officers to tell them that two ships were being taken out. The men told the officers that they had heard the rumour. The officers were not even given the courtesy

of being told that information at the meeting.
What has emerged from the debate is the close association of the Conservative Party with the development of the company. I shall give some examples. When the Labour Government was disposing of Transport Ferries, of which European Ferries was a part, it was proposed that the company should be sold to British Rail. When I asked the Conservative Government whether they proposed that that sale from one nationalised concern to another should go ahead, the Conservative Government said "No" and sold it to the private sector. That was how European Ferries came to be such a thriving company and to own ports. At that time at Hull, there was a dead shipping company, owned by the same Transport Ferries, not making a profit, which was not bought by the private sector. As a result, 300 or 400 men were put out of work. Had British Rail taken it over, it would have been developed on the profitable North Sea routes.
The close association of the Conservatives with this company is also shown by the number of Conservative Members who have declared a personal interest. Apart from the Opposition Front Bench spokesmen, all Conservatives who have spoken have declared an interest.
Delay has been caused by the Prayer tabled by six Tories against the Bill, which I regret. The directors of the Company did not oppose the sale of the Company to the British Transport Docks Board. Then we heard of the documents of 5th March and 19th March, which clearly stated, after the shareholders' decision, that the directors still agreed that the Company should go to the British Transport Docks Board. Then, in time for tonight, we are told that the directors have conveniently changed their minds. All that suggests close association which reflects badly on the directors, and it is about time they went. Clearly, there is something wrong with their judgment.
The alternative purchaser, the British Transport Docks Board, is a large organisation which employs 11,000, 4,000 of whom are highly experienced on the direct labour scheme. That labour scheme is important if we are to have good labour relations. There have been times when there have been far from friendly


relations. There is a large amount of investment in the Board, and profitability has increased from year to year, which should be a telling factor for the Conservatives. As we are to nationalise the ports, and soon, Felixsttowe should be put into the public sector as a first step towards public ownership of all ports.

9.18 p.m.

Colonel Sir Harwood Harrison: I do not intend to follow the speech made by the hon. Member for Kingston upon Hull, East (Mr. Prescott) nor shall I speak at such length. I support my hon. Friend the Member for Sudbury and Woodbridge (Mr. Stainton), who has already given much help to the Felixstowe Dock Company. I recommend his speech for consideration by all hon. Members before they vote on the Bill. I wish that it had been heard by more.
In Suffolk we are proud of what has happened in this port and we are ever grateful to Colonel Parker for leaving his neighbouring county of Norfolk to carry out that work. Many in my constituency travel up to 25 miles to go to Felixstowe Docks, yet I have never received a letter showing dissatisfaction with the conditions under which those people work. Relations have been good, and good wages have been paid.
I had letters of disapproval from some of the shareholders when the first offer was made because they felt that it was at too low a figure in relation to the assets of the Company. Acceptance was recommended because there was a threat of nationalisation. I think that was behind the board's agreeing to it. It thought that under the British Transport Docks Board, which has some decentralised control, it would be left as an independent business.
The haven ports, as we regard Felixstowe, Harwich and Ipswich, with one estuary, together form the third largest port in England. My figures are not up to date, and it may well be that it has now overtaken Liverpool. It is important for the whole of the area that it should be well served by the port. Both this Government, and the Conservative Government before it were keen that there should be proper communications from the Midlands, from which so many goods are exported through Felixstowe to all

parts of the world. They wished to see the communications brought up to a high standard.
I was very glad to see the Minister for Transport here earlier, and hope that he will be told about these matters. I know that from the point of view of his own constituency interests, in the Birmingham area, the Minister is also anxious about road communications with the port.
A great deal has been said about European Ferries and the extra bid made tonight. I believe that it is perfectly legitimate that this offer should be made to shareholders who did not accept the previous offer. There was no contract. My hon. Friend the Member for Gillingham (Mr. Burden), in his intervention, showed a lot of non-knowledge of contractual law. If my hon. and learned Friend the Member for Dover and Deal (Mr. Rees) had caught your eye, Mr. Deputy Speaker, I am sure that he would have drawn attention to this.
We are all concerned with the future well-being of Felixstowe, but there is no secret on the Government side that they want Felixstowe Docks to be nationalised. Here we have a big private enterprise dock, and it would be a very good example to keep outside nationalisation, so that we can compare one with the other.
Since we have been in the EEC, the importance of Felixstowe as a dock has increased tremendously. A great many ships can come there now. When it is dredged, so that the bar is lower, many more ships, which would otherwise go to Rotterdam, will be able to come direct to Felixstowe. There is a chance to increase the trade of the port.
I hope that some hon. Gentlemen on the Government side will have been convinced by these arguments. I believe that the Bill in its present form should be turned down. If it goes through, the people employed in the port will not have the knowledge they now have that their future is assured. At present, they have opportunities to advance. That is what I want them to have. Great expansion is taking place in Suffolk and that expansion can continue, provided that the Felixstowe dock expands and grows. It has a tremendous record under private enterprise—far better than that of any


other port. Let us keep it that way in the future.

9.25 p.m.

Mr. Walter Johnson: At the outset, I have to declare my interest, in that I happen to be an honorary national officer of the Transport Salaried Staffs' Association—one of the unions that negotiate for the staff of the British Transport Docks Board—and vice-chairman of the National Joint Consultative Council of the Docks Board, in that second capacity, I have opportunities to see the Docks Board in operation and to understand the fundamental way in which it approaches the problems in this industry.
In the Docks Board Joint Consultative Council there are provisions for each port to make regular reports. The meetings are held every two or three months, and the opportunity is provided at those meetings for individual reports on the activities of the various port authorities. This means that each of them has the opportunity to run its own show, and that is what we are saying in the terms of the Bill.
Whether we like it or not, this debate has developed into a fundamental one. Opposition Members obviously believe in private enterprise. Government supporters believe in public ownership where it is essential in the national interest, and we shall continue to pursue that line.
In any event, the record of the Opposition is not a very proud one. Most of our national industries were taken over between 1946 and 1950. Then, for 17 years, we had two periods of Conservative government, Apart from handing back the profitable section of the road haulage industry in the 1950s, there has been no denationalisation of the major industries taken over by the Labour Government between 1945 and 1951. The Conservative Government burned their fingers when they were last in power by denationalising Thomas Cook and Son. We know that that business is in serious financial difficulty today. The Conservative Party has nothing to boast about in its attitude towards the nationalised industries.
I consider it necessary to give some of the facts about the port of Felixstowe.

As we know, the port is the largest privately-owned port in Britain, excluding the Manchester Ship Canal. The docks employ approximately 1,200 staff. In1974, the Company made a pre-tax profit of £724,388 on a turnover of £8·55 million—an increase of almost 35 per cent. over the previous year. In 1974, 4·2 million tons were handled—an increase of 14·8 per cent.
Felixstowe is a modern installation, and a £10 million improvement scheme has been completed only recently, but it needs - to spend at least another £5 million on new cranes and other equipment. I submit that a takeover by an existing public body such as the British Transport Docks Board would be a distinct advantage for the port.
The Docks Board has stated that it is prepared to put money into Felixstowe to ensure a more rapid growth rate for the; port. At the same time, the Board has: stated that the port would be run outside its overall umbrella, but that if the port: is to draw money from Docks Board assets for future expansion, the returns from the port should be fully integrated with Docks Board finances, to the mutual benefit of all Docks Board staff.
European Ferries, which is the company behind the alternative bid, is one of the five major users of the port. The others are International Paper Corporation, Tor Line, British Anzani and Christian Salvesen.
My hon. Friend the Member for Leicester, East (Mr. Bradley) told the House that at an extraordinary meeting of the Felixstowe shareholders on 21st November 1975 a proposed acquisition was approved by a majority of more than 75 per cent. of those voting. The final figure, however, showed that 871 stockholders, representing 1,932,598 shares and 87·95 per cent. of the votes cast, were in favour of the takeover, while 434 stockholders, owning 264,758 shares—12·05 per cent. of the votes cast—were against it.
The Chairman, Mr. Gordon Parker, stated at the extraordinary meeting that in his view the acquisition by the Board would enable the port to be developed further, to the benefit of customers, employees and the nation. I emphasise that he thought it would to be the benefit of "customers, employees and the


nation". I hope that hon. Members will take that into account when they vote tonight.
The Bill contains a unique undertaking from the British Transport Docks Board not to divert traffic using Felixstowe to any of its other ports. That provision is contained in Schedule 1(2)(a). The unions in the industry believe that the port should be completely absorbed within the Board. The general manager of the British Transport Docks Board has outlined the advantages of leaving the Company as a wholly-owned subsidiary. In his view the Company has built up statutory rights and obligations during its 100 years' existence, and he believes that there are advantages in operating through the existing framework. In addition, there are further advantages in retaining the Company's financial structure, including the existing debentures.
An alternative bid for the port has been submitted by European Ferries, and during the debate much has been made of the suggestions that this is a better offer than that made by the Board. It could be said that the success of such a bid might militate against the other port users and, in the long term, be disadvantageous to the port, the customers and those who work in the industry.

Mr. Ridley: I am sorry to interrupt the hon. Member, who is reading from a union brief. Can he explain why the users of the port have made it clear that they would like European Ferries to take over?

Mr. Johnson: That is contrary to the information we have. My hon. Friend the Member for Ipswich (Mr. Weetch) made it clear that in discussions he has had with the staff he learned that they wanted this takeover. My hon. Friend also had discussions with European Ferries, whose labour relations leave much to be desired. That is the information that has been given to the House, and I see no reason to say that it is not correct. I believe that this is the right move, and that it will be in the interests of customers, users and staff. I believe that the British Transport Docks Board will do an exceptionally good job. The Bill requires, and should have, the support of the House, and I hope that we will vote in favour of it tonight.

9.34 p.m.

Mr. Peter Rees: Since there have been a variety of allegations levelled against my hon. Friends from the Government Benches, I shall declare my interest before taking part in the debate. In deference to the sensitivity of Labour Members, I must tell the House that neither I nor my family have any shares in the Felixstowe Dock Company or European Ferries. But I notice that, in common with all other taxpayers, up to 1972 I contributed my share of £120 million to the finances of the British Transport Docks Board.
It may come as a surprise to hon. Members on the Government Benches to hear it, but if they had taken the trouble to look at the Public Expenditure White Paper—perhaps it is a little unkind to remind them of the traumas of a fortnight ago—they would have discovered that this year we are again contributing £12 million to the Board and we will continue to do that for the next four years. If we are to make comparisons between the finances of European Ferries and the British Transport Docks Board, we should know all the figures and not just a partially doctored account.
I am participating in the debate because European Ferries has operated with conspicuous success and with a great deal of local good will from, and in, the port of Dover.
After listening to the speech of the hon. Member for Ipswich (Mr. Weetch), I find some imperfectly understood words of Dryden coming to mind:
Willing to wound, and yet afraid to strike".
It would have been better if the hon. Gentleman had thought through his speech a little more carefully and if he had grounded his allegations against Opposition Members and the companies concerned more carefully on facts and perhaps repeated them outside the House, where those who are not Members could have had some recourse against him.
However, enough of the hon. Gentleman's speech. I make only the following point, because the hon. Member for Derby, South (Mr. Johnson) placed some weight on the evidence that the hon. Gentleman gave the House about the state of labour relations in Felixstowe. After listening to the hon. Member for Ipswich, I would not accept a word he said on


that subject unless it were corroborated to the hilt.
I wish to reassure those of my hon. Friends who represent East Anglian constituencies that I am not for a moment advocating the colonisation of Felixstowe by Dover. I want to put my credentials on the record so that they may be scrutinised. We could enlarge the debate—as Labour Members have done, including the hon. Member for Leicester, East (Mr. Bradley), who moved the Second Reading—into a far-ranging debate on the merits or demerits of nationalisation. I would willingly take up that challenge. If it would not embarrass him, I could portray Mr. Keith Wickenden of European Ferries as a free-enterprise David taking on the Goliath of nationalisation.
However, in the time available I prefer to concentrate on the narrower issue of whether it is right for the House to legislate to override a bid freely made by European Ferries and freely accepted by 85 per cent. of the Felixstowe Company's shareholders, in order to substitute a less attractive bid by the British Transport Docks Board. It has been argued that the Board's offer preceded that of European Ferries. So it did. We can examine the reason in a moment. It has been rightly argued that, initially at any rate, it was recommended by the board of directors of the Felixstowe Company and accepted by a majority of the shareholders. However, it failed to become a binding agreement.
That is a point that the hon. Member for Leicester, East and the Minister for Transport—

Mr. Bradley: The agreement to which the hon. and learned Gentleman has just referred, which forms Schedule 1 to the Bill, is under seal. Surely that makes it binding.

Mr. Rees: I do not want to be led into a mesh of legal arguments, though I would willingly enlighten the hon. Gentleman. The mere fact that the agreement is under seal does not of itself make it immediately enforceable. If the hon. Gentleman had studied the agreement scheduled to the Bill a little more closely, he would have seen that it was conditional on the Bill's becoming law. In other words, it was not immediately enforceable.
The Minister, I hope unwittingly, misled the House on this point. He would have been better advised to seek the advice of the Law Officers, who, I am sure, would have given the same advice as I am perhaps rashly giving him now. There was no question of there being an immediately enforceable agreement between the Board and the shareholders of the Felixstowe Company.
All these arguments must be viewed against the background of the facts. The Felixstowe Company received in October 1975 a conditional offer worth 150p a share. Be it noted that that would have involved the shareholders in an immediate charge to capital gains tax. The European Ferries offer is worth about 190p a share, based on the value of its shares. The hon. Member for Leicester, East said, as he is entitled to say, that it was a speculative offer and that the value of the shares is likely to rise and fall. So it is, but the shareholders were well able to weigh that, and when the offer was made there was no doubt where the balance of financial advantage to them lay.
The recommendation of the board of the Felixstowe Company to its shareholders is about the coolest recommendation I have ever read. It was cool to the point of frigidity. My hon. Friend the Member for Sutton Coldfield (Mr. Fowler), who spoke from the Front Bench, read a passage from the chairman's letter. I should like to add one short passage:
I have set out the background so that you can understand the difficult situation which confronts your Board and also so that you can understand the reason why your Board is receptive to the conditional offer made by the BTDB.
In a way, that letter of the chairman is one of the most revealing industrial documents that has been presented to us, because in a non-partisan, almost unconscious way it passes a verdict on 13 years of Wilsonism. It demonstrates so very clearly why British industry has not been able to compete as effectively as its foreign competitors, because those in British industry have never at any moment been able to say exactly what the Labour Government were going to do to them or able at any moment in time to see the way ahead and whether any investment required would have yielded fruit.
If hon. Gentlemen want to know why there has not been sufficient investment in British industry, they should read and re-read the letter of Mr. Gordon Parker to his own shareholders against the background of this particular bid. It seems that, in spite of all the sensitive treatment of private capital by the Chancellor of the Exchequer, the even-handed way in which the right hon. Member for Ebbw Vale (Mr. Foot) has treated the most outrageous claims of the major unions and the Wykehamist moderation with which the right hon. Member for Bristol, South-East (Mr. Benn) has handled private enterprise, Mr. Gordon Parker had firmly come to the conclusion by October 1975 that he had had enough, after building up one of the most successful private enterprises in Britain. That is a commentary on 13 wasted years of Wilsonism.
Unfortunately for the shareholders of the Company and its board, they did not at that time know that help was at hand in the shape of Mr. Keith Wickenden and European Ferries. In February 1976 a much better offer was made which was accepted by 85 per cent. of the shareholders, including, as my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) will confirm, the board and, I believe, the families of the board. If anything was needed to demonstrate the altered view of the board against the background of the offer by European Ferries, it is this particular fact. That offer now has become unconditional.
The hon. Member for Leicester, East, with all his legal knowledge, cannot gainsay that the offer is now unconditional, and, if he would like me to condescend to legalities, the beneficial interest in the shares of the Felixstowe Dock Company has now passed to European Ferries.
I would, however, ask the House to look beyond the situation of the shareholders, important though that is. First of all there is the question of the future of the dock itself. It will be noted that the guarantees of the Docks Board are highly qualified and they depend on directives that will be given to it by the Minister for Transport, who read to the House tonight, with his head down, a brief presented to him by his civil servants.
The Minister was remarkably uncommunicative on what he had in mind for

Felixstowe, but those who work in the dock, both management and employees, will want to know his future plans. What about the future effects on those who work there? All who have direct experience of Felixstowe—and I totally disregard the evidence of the hon. Member for Ipswich unless it is corroborated to the hilt; it was so shot with partisan bias that it was not worth the hot air that the hon. Member blew into the Chamber—have told us that labour relations there are excellent.
I can testify that the labour relations so far as they concern European Ferries at the port of Dover are very good. It has been involved in only one official strike in 20 years, that by the National Union of Seamen in 1967, described by the Prime Minister as a strike by politically-motivated men. I am sorry to say through you, Mr. Speaker, to the hon. Member for Kingston upon Hull. East (Mr. Prescott) that the Prime Minister is now less mealy-mouthed and calls them not politically motivated men but Marxists, and is backed up by the Chancellor of the Exchequer calling them blackmailers with tiny Chinese minds. I leave the House to choose which of those particular descriptions it prefers. My point is that the only major industrial confrontation in which European Ferries has been involved was the strike in 1967 by the National Union of Seamen.
It is no part of my case, or that of the Opposition Front Bench, to attempt to criticise the position of the Docks Board. It has a difficult industry to run, and no doubt, with the Minister for Transport breathing down its neck, the position of the Board is yet more difficult. I ask the House to consider labour relations in Southampton, however. Regrettably, labour relations there are in an unenviable state. Would the people who work at Felixstowe welcome this change of allegiance?
I turn now to the situation of the port users. It was rashly said by Labour Members that it would be wrong for a shipping company operating from Felixstowe to be in control of that Dock. Does the same principle apply to the British Rail ports? What about Holyhead and Folkestone? One may well say that what is sauce for the private enterprise goose is sauce for the nationalised gander. Is


it a good idea that British Rail should have this monopoly position?
Let us test it this way. European Ferries controls two ports, Larne and Cairnryan. How has it exercised its monopoly position there? It is noticeable that it has admitted one of its most formidable competitors, P & O. If there were any real worry on that score, would the Secretary of State for Prices and Consumer Protection have turned down the suggestion by the hon. Member for Ipswich that this matter should be referred to the Monopolies Commission? She sized him up in about the same way as hon. Members will have done this evening.
If any monopoly position is involved in this issue it will be the position of the Docks Board if it acquires the Felixstowe Company, because it will acquire 30 per cent. of the market. Every container port on the East Coast—excluding Harwich, which is not a container port, of course—will be under the control of the Docks Board.

Mr. Ridsdale: Parkeston is a container port too.

Mr. Rees: Then every major container port, leaving aside Parkeston, will be under the control and ownership of the Docks Board. Is a near-monopoly any more healthy if it is public? I doubt it.
I turn now to the question of port expansion, because we are told that the reason why the Felixstowe company has had to bow out is that it has not got access to funds. One understands the position. It is made clear in Mr. Parker's letter to his shareholders. One sympathises with his predicament.
But European Ferries is well able out of its own cash flow, without recourse to the public purse, to finance the developments that are necessary. Hon. Members have made cheap jibes about the company not having paid any tax. It has not paid any tax precisely because it has taken advantage of the capital allowances presumably introduced and left in force by Labour Governments because they wished British shipping to take advantage of them. Is that a legitimate basis of criticism of European Ferries?
It has been admitted by hon. Members opposite that the Docks Board has not

paid much tax—I doubt whether it has paid a penny over the last 10 or 12 years. When we look at the sources of capital for Felixstowe for development and maintenance, is it better that the money should be found from the capital market by private enterprise or that the Docks Board should come to this House year after year for greater and greater infusions of capital? I remind the House that £123 million of our money was injected into the Docks Board up to 1972. Do Labour Members want public money to be channelled into hospitals, schools and so on or into Felixstowe when money for Felixstowe could be found far more readily and administered with greater efficiency by a private company? I am unconvinced that the Docks Board could run Felixstowe more efficiently, more cheaply, more competitively or with better labour relations than European Ferries.
We must look for a little reason behind the Bill. Of course, the hon. Member for Leicester, East has no concern in his constituency for the viability of our ports, exception a general sense. I find behind this Bill the urbane but sinister figure of the Minister for Transport. That has come out. We are told that this is too important an asset to be left to free enterprise. Of course, with the laurels of his great victory in the seat belts debate still fresh on his brow, the Minister is now moving in for the kill in another sector. The hammer of the motorist has now become the hammer of the private docks. His greedy hand is hovering over this Naboth's vineyard in East Anglia. I hope that we shall be able to brush that hand aside. He has secured his niche in history, along with his predecessor who introduced the Belisha beacon, as the introducer of the Gilbert seat belt. Let him be satisfied with that and let us reject the Bill tonight.

9.51 p.m.

Mr. Peter Viggers: In seeking to draw together the threads of the debate I have to declare an interest that will no doubt delight hon. Members who sit below the Gangway. My interest is recorded. It is that I have visited ports in the United Kingdom and Germany by arrangement with the British Transport Docks Board. I found the visits most valuable, and I learnt to respect the Board's management.
We have heard a lot this evening about the dramatic growth of the Felixstowe Dock and Railways Company from its incorporation in 1875 through to the 1950s when it was virtually moribund, with only nine dockers. We have heard about the dramatic growth since then and of the developments that have taken place supported by the twin pillars of dynamic management and private enterprise, reaching out across the North Sea to secure trade. Felixstowe Dock has always had a good pensions scheme, profit-sharing bonuses, life insurance and sick pay at basic rates. These are important. The growth of the dock was a triumph of private enterprise.
We have heard about the threat posed to Felixstowe from both nationalisation and the extension of the Dock Labour Scheme. The Scheme is irrelevant in the context of the thriving and thrusting spirit of Felixstowe's expansion, and its imposition on Felixstowe would undoubtedly dampen the port's competitive edge.
We have heard about the approach by European Ferries. Its offer was better than that of the Docks Board. This has been clearly demonstrated, because the holders of 85 per cent. of the shares of Felixstowe Dock have already accepted European Ferries' offer. The question is whether European Ferries is a worthy operator of a major port. It has an exceptional profit and growth record. Its value on the Stock Exchange is £50 million. The hon. Member for Ipswich (Mr. Weetch) called it a juggernaut, perhaps not realising that it represents 70,000 shareholders, 70 per cent. of whom are private shareholders and the other 30 per cent. institutions, including the trade unions.
European Ferries' cross-Channel ferries are the most modern in existence. The average age of its ships is five years. The average age of the ships belonging to its main competitor—British Rail Sealink—is 17 years—

Mr. Loyden: Why?

Mr. Viggers: Why, indeed? It is a good example of the way that private enterprise can plan and buy modern ships.
European Ferries has a short but excellent record as a port operator at

Larne. Since it acquired Larne Harbour in 1973, the work force there and at its associated port at Cairnryan has increased from about 100 to 160. The profits at Larne have trebled, despite the fact that it has some of the lowest port charges in the United Kingdom.
When Larne was acquired by European Ferries it was used by British Rail's Sealink. It is now also used by a P & O subsidiary, which proves that European Ferries will not operate solely for its own benefit and is not frightened by competition. More port activity in Larne means more jobs and prosperity for the area. That is what will happen at Felixtowe.
I have no intention of attacking the British Transport Docks Board. Its return on capital employed is fair. To use the chairman's words in the 1974 report, the return on assets of 7·8 per cent. in 1974 was not discouraging in the un-favourable circumstances that prevailed. But he went on to say that it was clear that if the Board were to be assured of a sound commercial and financial future the rate of return on assets employed must be substantially increased.
It is a fact that the Board benefits from substantial amounts of loan capital, totalling £76 million, which are linked by the Secretary of State for the Environment at a rate of 3·61 per cent. That is £76 million, at approximately 3½ per cent., aiding the profits of the Docks Board. I pay tribute to those who work to achieve results for the Board, but none of these is relevant in the context of deciding which is the better offer for Felixstowe. Such a comparison should be made from the point of view of those concerned.
From the employers' point of view, the European Ferries offer will be better. The British Transport Docks Board has given an undertaking that it will not seek to direct existing traffic away from Felixstowe. No one doubts the good faith of that offer. But it would be contrary to the duty of the Board and of the interests of its other port employees and operators if it were to seek to build up Felixstowe at their expense. However, European Ferries would have the single-minded and whole-hearted determination to build up Felixstowe as rapidly as possible.
From the shareholders' point of view, the offer by European Ferries gives a


substantially higher cash value than the other offer. Felixstowe shareholders who have accepted and will accept the European Ferries offer are free to realise more cash than they would have received under the other offer, or they can continue as shareholders in a private enterprise company with a fine growth rate.
The hon. Member for Ipswich indicated that the 15p extra offered by European Ferries could be construed as an inducement to hon. Members to vote the Bill out. If the hon. Gentleman thinks that we can be bought for 15p, I suggest that that shows the breadth of vision of his "Chinese mind ".
From the national point of view, it must be right that the only substantial port in private enterprise ownership should continue to blaze a trail of success and innovation. On every count and from every point of view, the European Ferries offer must be preferred.
This Bill does not call on us, as a legislative body, to judge the comparative

merits of two competitive take-over offers. The better bid has succeeded and European Ferries now owns 85 per cent. of Felixstowe. Events have overtaken the Bill. Instead of permitting the British Transport Docks Board to buy the Felixstowe shares from the original shareholders, the Bill will have the effect of compulsorily wresting the shares from European Ferries. The effect will be a compulsory nationalisation and the Felixstowe company will be wrested from the welcome embrace of European Ferries and thrust into the arms—

Mr. Walter Johnson: Mr. Walter Johnson rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the Bill be now read a Second time:—

The House divided: Ayes 264, Noes 236.

Division No. 98.]
AYES
[10.00 p.m.


Allaun, Frank
Cook, Robin F. (Edin C)
Freeson, Reginald


Anderson, Donald
Corbett, Robin
Garrett, John (Norwich S)


Archer, Peter
Cox, Thomas (Tooting)
Garrett, W. E. (Wallsend)


Armstrong, Ernest
Craigen, J. M. (Maryhill)
George, Bruce


Ashley, Jack
Crawshaw, Richard
Gilbert, Dr John


Ashton, Joe
Cronin, John
Golding, John


Atkins, Ronald (Preston N)
Crosland, Rt Hon Anthony
Gould, Bryan


Atkinson, Norman
Cunningham, Dr J. (Whiteh)
Gourlay, Harry


Bagier, Gordon A. T.
Dalyell, Tam
Graham, Ted


Barnett, Guy (Greenwich)
Davidson, Arthur
Grant, George (Morpeth)


Barnett, Rt Hon Joel (Heywood)
Davies, Bryan (Enfield N)
Grant, John (Islington C)


Bates, Alf
Davies, Ifor (Gower)
Grocott, Bruce


Bean, R. E.
Davis, Clinton (Hackney C)
Hamilton, James (Bothwell)


Bennett, Andrew (Stockport N)
Deakins, Eric
Hamilton, W. W. (Central Fife)


Bidwell, Sydney
Dean, Joseph (Leeds West)
Harper, Joseph


Bishop, E. S.
Delargy, Hugh
Harrison, Waiter (Wakefield)


Blenkinsop, Arthur
Dell, Rt Hon Edmund
Hart, Rt Hon Judith


Boardman, H.
Dempsey, James
Hattersley, Rt Hon Roy


Booth, Rt Hon Albert
Doig, Peter
Hayman, Mrs Helene


Bottomley, Rt Hon Arthur
Dormand, J. D.
Healey, Rt Hon Denis


Boyden, James (Bish Auck)
Douglas-Mann, Bruce
Heffer, Eric S.


Bradley, Tom
Duffy, A. E. P.
Horam, John


Bray, Dr Jeremy
Dunn, James A.
Howell, Rt Hon Denis


Brown, Hugh D. (Provan)
Dunnett, Jack
Hoyle, Doug (Nelson)


Brown, Robert C. (Newcastle W)
Eadie, Alex
Hughes, Rt Hon C. (Anglesey)


Buchan, Norman
Edge, Geoff
Hughes, Mark (Durham)


Buchanan, Richard
Edwards, Robert (Wolv SE)
Hughes, Robert (Aberdeen N)


Butler, Mrs Joyce (Wood Green)
Ellis, John (Brigg &amp; Scun)
Hughes, Roy (Newport)


Callaghan, Jim (Middleton &amp; P)
English, Michael
Hunter, Adam


Campbell, Ian
Ennals, David
Irvine, Rt Hon Sir A. (Edge Hill)


Canavan, Dennis
Evans, Fred (Caerphilly)
Irving, Rt Hon S. (Dartford)


Cant, R. B.
Evans, loan (Aberdare)
Jackson, Colin (Brighouse)


Carmichael, Neil
Ewing, Harry (Stirling)
Jackson, Miss Margaret (Lincoln)


Carter, Ray
Faulds, Andrew
Janner, Greville


Carter-Jones, Lewis
Fernyhough, Rt Hon E.
Jay, Rt Hon Douglas


Cartwright, John
Fitch, Alan (Wigan)
Jeger, Mrs Lena


Castle, Rt Hon Barbara
Flannery, Martin
Jenkins, Hugh (Putney)


Clemitson, Ivor
Fletcher, Raymond (Ilkeston)
Jenkins, Rt Hon Roy (Stechford)


Cocks, Michael (Bristol S)
Fletcher, Ted (Darlington)
John, Brynmor


Cohen, Stanley
Foot, Rt Hon Michael
Johnson, James (Hull West)


Coleman, Donald
Ford, Ben
Jones, Alec (Rhondda)


Colquhoun, Ms Maureen
Forrester, John
Jones, Barry (East Flint)


Concannon, J. D.
Fowler, Gerald (The Wrekin)
Jones, Dan (Burnlay)


Conlan, Bernard
Fraser, John (Lambeth, N'w'd)
Judd, Frank




Kelley, Richard
Newens, Stanley
Stoddart, David


Kerr, Russell
Noble, Mike
Stott, Roger


Kilroy-Silk, Robert
Oakes, Gordon
Strang, Gavin


Lamborn, Harry
Ogden, Eric
Strauss, Rt Hon G. R.


Lamond, James
Orbach, Maurice
Summerskill, Hon Dr Shirley


Latham, Arthur (Paddington)
Ovenden, John
Swain, Thomas


Lee, John
Park, George
Taylor, Mrs Ann (Bolton W)


Lestor, Miss Joan (Eton &amp; Slough)
Parker, John
Thomas, Jeffrey (Abertillery)


Lever, Rt Hon Harold
Parry, Robert
Thomas, Ron (Bristol NW)


Lewis, Ron (Carlisle)
Pavitt, Laurie
Thorne, Stan (Preston South)


Lipton, Marcus
Peart, Rt Hon Fred
Tierney, Sydney


Loyden, Eddie
Pendry, Tom
Tinn, James


Luard, Evan
Perry, Ernest
Tomlinson, John


Lyons, Edward (Bradford W)
Phipps, Dr Colin
Torney, Tom


Mabon, Or J. Dickson
Prentice, Rt Hon Reg
Tuck, Raphael


McCartney, Hugh
Prescott, John
Walden, Brian (B'ham, L'dyw'd)


McElhone, Frank
Price, C. (Lewisham W)
Walker, Harold (Doncaster)


McGuire, Michael (Ince)
Price, William (Rugby)
Walker, Terry (Kingswood)


Mackenzie, Gregor
Radice, Giles
Ward, Michael


Maclennan, Robert
Rees, Rt Hon Merlyn (Leeds S)
Watkins, David


McMillan, Tom (Glasgow C)
Richardson, Miss Jo
Weetch, Ken


McNamara, Kevin
Roberts, Albert (Normanton)
Weitzman, David


Madden, Max
Roberts, Gwilym (Cannock)
Wellbeloved, James


Magee, Bryan
Robinson, Geoffrey
White, Frank R. (Bury)


Maguire, Frank (Fermanagh)
Roderick, Caerwyn
White, James (Pollok)


Mahon, Simon
Rodgers, George (Chorley)
Whitehead, Phillip


Mallalieu, J. P. W.
Rodgers, William (Stockton)
Whitlock, William


Marks, Kenneth
Rooker, J. W.
Willey, Rt Hon Frederick


Marquand, David
Rose, Paul B.
Williams, Alan (Swansea W)


Marshall, Dr Edmund (Goole)
Ross, Rt Hon W. (Kilmarnock)
Williams, Alan Lee (Hornch'ch)


Maynard, Miss Joan
Rowlands, Ted
Williams, Rt Hon Shirley (Hertford)


Meacher, Michael
Sedgemore, Brian
Williams, Sir Thomas


Mellish, Rt Hon Robert
Selby, Harry
Wilson, Alexander (Hamilton)


Mikardo, Ian
Shaw, Arnold (Ilford South)
Wilson, Rt Hon H. (Huyton)


Millan, Bruce
Sheldon, Robert (Ashton-u-Lyne)
Wilson, William (Coventry SE)


Miller, Dr M. S. (E Kilbride)
Shore, Rt Hon Peter
Wise, Mrs Audrey


Miller, Mrs Millie (Ilford N)
Silkin, Rt Hon John (Deptford)
Woodall, Alec


Mitchell, R. C. (Soton, Itchen)
Silkin, Rt Hon S. C. (Dulwich)
Woof, Robert


Molloy, William
Silverman, Jullus
Wrigglesworth, Ian


Moonman, Eric
Skinner, Dennis
Young, David (Bolton E)


Morris, Alfred (Wythenshawe)
Small, William



Morris, Charles R. (Openshaw)
Snape, Peter
TELLERS FOR THE AYES:


Morris, Rt Hon J. (Aberavon)
Spearing, Nigel
Mr. Bob Cryer and


Moyle, Roland
Spriggs, Leslie
Mr. Walter Johnson.


Mulley, Rt Hon Frederick
Stallard, A. W



Murray, Rt Hon Ronald King
Stewart, Rt Hon M. (Fulham)





NOES


Adley, Robert
Cockcroft, John
Glyn, Dr Alan


Altken, Jonathan
Cooke, Robert (Bristol W)
Godber, Rt Hon Joseph


Alison, Michael
Cope, John
Goodhart, Philip


Arnold, Tom
Cormack, Patrick
Goodhew, Victor


Atkins, Rt Hon H. (Spelthorne)
Corrie, John
Goodlad, Alastair


Baker, Kenneth
Costain, A. P.
Gow, Ian (Eastbourne)


Banks, Robert
Critchley, Julian
Gower, Sir Raymond (Barry)


Beith, A. J.
Crouch, David
Grant, Anthony (Harrow C)


Bell, Ronald
Davies, Rt Hon J. (Knutsford)
Gray, Hamish


Bennett, Dr Reginald (Fareham)
Dean, Paul (N Somerset)
Griffiths, Eldon


Benyon, W.
Dodsworth, Geoffrey
Grimond, Rt Hon J.


Berry, Hon Anthony
Douglas-Hamilton, Lord James
Grist, Ian


Biffen, John
Drayson, Burnaby
Grylls, Michael


Biggs-Davison, John
du Cann, Rt Hon Edward
Hall, Sir John


Blaker, Peter
Durant, Tony
Hall-Davis, A. G. F.


Body, Richard
Eden, Rt Hon Sir John
Hamilton, Michael (Salisbury)


Boscawen, Hon Robert
Edwards, Nicholas (Pembroke)
Hampson, Dr Keith


Bottomley, Peter
Elliott, Sir William
Hannam, John


Bowden, A. (Brighton, Kemptown)
Emery, Peter
Harrison, Col Sir Harwood (Eye)


Boyson, Dr Rhodes (Brent)
Eyre, Reginald
Harvie Anderson, Rt Hon Miss


Braine, Sir Bernard
Fairbairn, Nicholas
Hastings, Stephen


Brocklebank-Fowler, C.
Fairgrieve, Russell
Havers, Sir Michael


Brotherton, Michael
Fell, Anthony
Heseltine, Michael


Brown, Sir Edward (Bath)
Finsberg, Geoffrey
Hicks, Robert


Bryan, Sir Paul
Fisher, Sir Nigel
Higgins, Terence L.


Buchanan-Smith, Alick
Fletcher-Cooks, Charles
Holland, Philip


Buck, Antony
Fookes, Miss Janet
Hordern, Peter


Budgen, Nick
Forman, Nigel
Howe, Rt Hon Sir Geoffrey


Bulmer, Esmond
Fowler, Norman (Sutton C'f'd)
Howell, David (Guildford)


Butler, Adam (Bosworth)
Fox, Marcus
Howell, Ralph (North Norfolk)


Carlisle, Mark
Freud, Clement
Hunt, David (Wirral)


Chalker, Mrs Lynda
Fry, Peter
Hurd, Douglas


Clark, Alan (Plymouth, Sutton)
Gardiner, George (Reigate)
Hutchison, Michael Clark


Clark, William (Croydon S)
Gardner, Edward (S Fylde)
Irving, Charles (Cheltenham)


Clarke, Kenneth (Rushclitffe)
Gilmour, Rt Hon Ian (Chesham)
James, David


Clegg, Walter
Gilmour, Sir John (East Fife)
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)







Johnson Smith, G. (E Grinstead)
Morrison, Charles (Devizes)
Shepherd, Colin


Jones, Arthur (Daventry)
Morrison, Hon Peter (Chester)
Silvester, Fred


Jopling, Michael
Mudd, David
Sims, Roger


Joseph, Rt Hon Sir Keith
Neave, Airey
Sinclair, Sir George


Kellett-Bowman, Mrs Elaine
Nelson, Anthony
Skeet, T. H. H.


Kershaw, Anthony
Neubert, Michael
Smith, Cyril (Rochdale)


Kimball, Marcus
Newton, Tony
Smith, Dudley (Warwick)


King, Evelyn (South Dorset)
Normanton, Tom
Speed, Keith


King, Tom (Bridgwater)
Noll, John
Spence, John


Kitson, Sir Timothy
Onslow, Cranley
Spicer, Jim (W Dorset)


Knox, David
Oppenheim, Mrs Sally
Spicer, Michael (S Worcester)


Lamont, Norman
Page, John (Harrow West)
Sproat, lain


Lane, David
Page, Rt Hon R. Graham (Crosby)
Stanbrook, Ivor


Langford-Holt, Sir John
Parkinson, Cecil
Stanley, John


Latham, Michael (Melton)
Pattie, Geoffrey
Steel, David (Roxburgh)


Lawrence, Ivan
Percival, Ian
Steen, Anthony (Wavertree)


Lawson, Nigel
Pink, R. Bonner
Stewart, Ian (Hitchin)


Le Marchant, Spencer
Powell, Rt Hon J. Enoch
Stradling Thomas, J.


Lester, Jim (Beeston)
Price, David (Eastleigh)
Taylor, R. (Croydon NW)


Lewis, Kenneth (Rutland)
Prior, Rt Hon James
Taylor, Teddy (Cathcart)


Loveridge, John
Pym, Rt Hon Francis
Temple-Morris, Peter


Macfarlane, Nell
Raison, Timothy
Thatcher, Rt Hon Margaret


MacGregor, John
Rathbone, Tim
Thomas, Rt Hon P. (Hendon S)


Macmillan, Rt Hon M. (Farnham)
Rees, Peter (Dover &amp; Deal)
Thorpe, Rt Hon Jeremy (N Devon


McNair-Wilson, M. (Newbury)
Rees-Davies, W. R.
Townsend, Cyril D.


McNalr-Wilson, P. (New Forest)
Renton, Rt Hon Sir D. (Hunts)
Tugendhat, Christopher


Madel, David
Rhys Williams, Sir Brandon
van Straubenzee, W. R.


Marten, Nell
Ridley, Hon Nicholas
Vaughan, Dr Gerard


Mather, Carol
Ridsdale, Julian
Wainwright, Richard (Colne V)


Maude, Angus
Rifkind, Malcolm
Walder, David (Clitheroe)


Mawby, Ray
Rippon, Rt Hon Geoffrey
Walker, Rt Hon P. (Worcester)


Maxwell-Hyslop, Robin
Roberts, Michael (Cardiff NW)
Wall, Patrick


Mayhew, Patrick
Roberts, Wyn (Conway)
Walters, Dennis


Meyer, Sir Anthony
Ross, Stephen (Isle of Wight)
Weatherill, Bernard


Miller, Hal (Bromsgrove)
Ross, William (Londonderry)
Wells, John


Miscampbell, Norman
Rossi, Hugh (Hornsey)
Whitelaw, Rt Hon William


Mitchell, David (Basingstoke)
Royle, Sir Anthony
Wiggin, Jerry


Moate, Roger
Sainsbury, Tim
Winterton, Nicholas


Monro, Hector
St. John-Stevas, Norman
Wood, Rt Hon Richard


Montgomery, Fergus
Scott, Nicholas
Young, Sir G. (Ealing, Acton)


More, Jasper (Ludlow)
Scott-Hopkins, James



Morgan, Geraint
Shaw, Giles (Pudsey)
TELLERS FOR THE NOES


Morgan-Giles, Rear-Admiral
Shaw, Michael (Scarborough)
Mr. Richard Luce and


Morris, Michael (Northampton S)
Shelton. William (Streatham)
Mr. Peter Viggers.

Question accordingly agreed to.

Bill read a Second time and committed.

Postponed proceeding on Question, That this House do now adjourn, resumed.

It being after Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

BRITISH TRANSPORT DOCKS (FELIXSTOWE) [MONEY]

Motion made, and Question proposed,
That it is expedient to authorise all such increased payments into and out of the Consolidated Fund and the National Loans Fund as may result, under sections 19 to 21 of the Transport Act 1962 (borrowing by the British Transport Docks Board and other Boards; loans by the Secretary of State and Treasury guarantee of Boards' other borrowing) from an Act of the present Session extending the powers and duties of the British Transport Docks Board with respect to the Port of Felixstowe and vesting in the Board the share capital of the Felixstowe Dock and Railway Company.—[Dr. Gilbert.]

10.15 p.m.

Mr. Nicholas Ridley: I should like to inquire a little about the Money Resolution. I am sorry it is such a thinly attended House. I expect this is because of the generally non-controversial nature of today's business.
We had no Whips on this side. Our first debate today was on international trade, which was so clearly non-controversial that my hon. Friends were not asked to be here. It is also well known that my hon. and right hon. Friends do not intend to divide later against the money for British Petroleum. As the interim business was only a Private Bill—

Mr. Speaker: Order. I have allowed a long preamble. The hon. Gentleman should now come to the Money Resolution.

Mr. Ridley: In such a thinly attended House, it is difficult to make oneself heard, Mr. Speaker. I was waiting to gain the attention of the House and was merely making the point that it is odd that we should have so much interest in this Bill on an evening when hon. Members could have spent their time at the cinema or the theatre. I do not know whether this is because of difficulties in the Whips' offices. I do not know whether the Liberal Party crisis—

Mr. Speaker: Order. The hon. Gentleman has ignored the warning I gave a moment ago. We are discussing the Money Resolution. While we have all enjoyed his preamble, I hope he will now get to the Resolution.

Mr. Ridley: The point I was coming to, Mr. Speaker, is that the Resolution will bring the total public expenditure to more than 60 per cent. of gross national product which is over the maximum amount the Home Secretary has said he would tolerate. I was, deviously I admit, working round to that because it is relevant to the contentious political climate in the Liberal and Labour Parties. However, I leave that point because, as always, I wish to bow to your request that I should stick firmly to the Money Resolution, Mr. Speaker.
I do not see why we need this resolution. The British Transport Docks Board has said that the £5,238,225 it will cost to implement the Bill can be made available without the need to borrow from public funds. Yet we are being asked to pass a Resolution which allows the Board to borrow from public funds specifically for the purpose of investing in the Felixstowe Docks.
I do not intend to divide the House because hon. Members have given their verdict on the principle of the Bill. Of course I do not know what other hon. Members may wish to do, but I shall simply ask a few questions.
Why do we need this Money Resolution when the money is already available? I have the accounts of the Board with me, and in short-term and long-term investments it has £6 million liquid. Why cannot the Board spend that money? If it has £6 million liquid, why has it not paid it back to the taxpayers already?
This is the Board that was described by the hon. Member for Leicester, East (Mr. Bradley) as a shining example of the success of public enterprise. He held it out as one of the great examples of the commercial success of the nationalised sector. I have to acquaint the House that it has capital employed of £154·9 million, on which it made profits last year of £1½ million, which works out at 0·45 per cent., and the Board, in all its history, has never paid one penny in taxation.
If the Board is prepared to stack up millions of pounds, why cannot it pay


a dividend? In the previous Labour Government's time there was an invention called public dividend capital. We used to use the initials "PDC", which was said to mean "payment deferred constantly ". Why cannot the Board pay a dividend to the taxpayers? If the Board is so rich that it can buy the Felixstowe Dock and Railway Company, why cannot it pay back something to us who finance it? Why must it have more money? Why does there have to be a Money Resolution? Why cannot the Board be allowed to spend its money on Felixstowe Dock instead of asking for more? Why does nationalisation always take money from the Exchequer, whereas the private sector always has to pay money into the Exchequer? Why cannot the process be reversed?
If we pass the Money Resolution, it will directly add to our financial problems. The amount is only £5¼ million, but, in an admittedly desperate economic situation, £5¼ million will be taken out of the public purse and put into the private sector. It will be given to the shareholders of the Felixstowe Dock and Railway Company, who will spend the money, thereby increasing the pressures of demand and the money supply. Although the amount is small, it is a token of the way the Government behave. On every occasion when there is opportunity for public retrenchment and reform, all they do is spend more public money.
When my hon. Friends have been challenged about how they would cut public expenditure, they have given examples. This is one more example to add to the list. If only the Government would desist from being financially irresponsible by making available money which they do not have, we might not have such a serious economic crisis. If the Board has £5¼ million to spare, it would be better to pay it back into the Exchequer and leave the Felixstowe Dock and Railway Company to be taken over by European Ferries. The private sector transaction would make no difference to the public sector or to the money supply.
These are such simple ideas that it is worth asking the House to dwell for a moment on the absurdity of our position. We have been through a week when the pound has been falling hourly. We have constantly been told that we have a public

expenditure explosion which is almost un-containable. Yet the Government cannot be diverted from their determination to go through every little piece of Socialist dogma, spending money on any bright idea they have even when, as tonight, they are faced with such an economic and industrial argument. They are still determined to go ahead, spending money. It is that more than anything else which loses them confidence in the international money markets, destroys their credibility as responsible people and damages employment prospects and prosperity. If they insist on pursuing this Money Resolution, the retribution will not come by a vote in which they will be defeated. It will come by a further diminution in the value of our currency and the confidence in which this Government are held.

10.25 p.m.

Mr. Geoffrey Dodsworth: The whole House is obliged to my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) for drawing our attention, with his accustomed wit and good humour, to some of the deficiencies in the legislation before the House this evening.
I should like to add to my hon. Friend's comments that it is a curious fact that the Money Resolution refers to public expenditure when in actual fact the statement makes it quite clear that no demand on public funds is intended or required.
Furthermore, when we examine the Money Resolution, we are led to believe that it has not gone through the customary satisfactory drafting processes which we might expect. I have taken the opportunity of looking at the guidance given by the Treasury on the drafting of such matters, set out in a document referred to as "Supply and other financial procedures of the House of Commons", published by the Treasury for official use.
It draws attention to the procedure which is applicable particularly in the case of a Private Bill. It points out what the procedure might be, and I hope we shall have an assurance from the Financial Secretary to the Treasury that the proper procedures have been observed in regard to what should happen when there is an incidental money clause requiring a Financial Resolution.
At that point we require to know that a letter has been sent by the Financial Secretary to the Treasury to the Clerk of the House of Commons. We then find that we draw on the normal procedure for Bills which are sanctioning expenditure, and we find there that where there is such a Resolution we must make sure that there is an identity of interest between the clauses contained in the original Bill, which are in italics, and the terms of the Money Resolution before the House. When we compare that with Clause 3 on page 3 of the original Bill, we see immediately that there is a disparity between the two things.
This raises the question whether we are satisfied with the terms in which the Money Resolution is drawn up. It is also clear, to quote from "Erskine May", that a Money Resolution
must not be more detailed than the terms of the corresponding clause in the bill as that might unduly restrict the power to move amendments.
The Money Resolution draws specific attention to
sections 19 to 21 of the Transport Act 1962 (borrowing by the British Transport Docks and other Boards …".
The Bill has no restriction as to sections.
I suggest that the Money Resolution is more restrictive than the terms of the Bill, and therefore restricts our ability to place amendments before the House. In these circumstances I suggest that we need an assurance from the Financial Secretary that he has carried out his proper duty in accordance with the wishes of the House.

10.29 p.m.

Mr. David Lane: As I have a direct constituency interest in the matter, I should like briefly to support my hon. Friends and remind the House of one or two of the main arguments which have not been answered, and of the reasons why we should not pass this Money Resolution.
First, the promoters of the Bill and the Government have not answered the argument that overwhelmingly the port users and the port workers of Felixstowe are opposed to the proposed take-over by the British Transport Docks Board.
Secondly, they have not answered the argument that overwhelmingly the shareholders of the company are opposed to this take-over.
Thirdly, they have not answered the argument that the take-over would be bad in general both for Felixstowe and for the country. I underline only one reason here, that the shift to State control of this port is very likely to undermine the whole reputation which it has built up. It is well known that Felixstowe has captured much of the deep-sea container trade, including that of American companies, and there is a big risk that if this take-over goes through, much of that trade will be lost to rival ports, such as Rotterdam.
I come, then, to my direct constituency interest. It is that any decline in the activity and prosperity of Felixstowe would reduce the income flowing to Trinity College in my Cambridge constituency, which is the owner of much of the land concerned.
I need not repeat the arguments so well put earlier in the evening by my hon. Friend the Member for Edinburgh, South (Mr. Hutchison). But, simply for the benefit of hon. Members who were not present, this is another reason why I am opposed to the Money Resolution which will enable this take-over to be put into effect. The income which flows is used for the general purposes of education and research and for the benefit not only of Trinity College but of other less well-off colleges in the rest of the university through the equalisation fund—

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. The hon. Member for Cambridge (Mr. Lane) will relate his speech to the Money Resolution.

Mr. Lane: I am trying to do that, because, to my simple mind, it is the Money Resolution which will make possible the carrying into effect of this Bill, and I am reminding the House of one of the harmful effects which we fear.
The money that is channelled through Trinity College also goes to many good causes in my constituency right outside the university. So, if the activity of Felixstowe declines through this Bill, made possible by the Money Resolution, education generally and good community causes in my constituency will suffer.
As there was misrepresentation earlier of the attitude of Trinity College, let me make it clear in this context that the college, as an objector, is not satisfied


with the assurances so far given by the promoters of the Bill.
If the Money Resolution is passed and the State steam-roller is allowed to override the opposition, not only will there be yet another chunk of unnecessary public expenditure, as my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) has reminded us, but the consequences will be lower efficiency in the whole of the British port industry, another set-back for democracy, and a blow against the wishes and interests of many individual people.

10.32 p.m.

Mr. Robin Maxwell-Hyslop: I wish to draw to your attention, Mr. Deputy Speaker, really as a point of order, that, notwithstanding that the last two lines of the Money Resolution read:
… the powers and duties of the British Transport Docks Board with respect to the Port of Felixstowe and vesting in the Board the share capital of the Felixstowe Dock and Railway Company ",
Clause 5 of the Bill is not printed in italics, although the clause potentially creates a charge upon the Revenue and should not therefore be amended by the House of Lords, since that would be in breach of the privilege of the Commons.
The clause which executes the last two lines of the Money Resolution should properly have been printed in italics so that the prerogative of the House of Commons to control expenditure is not abrogated. Since it has not been printed in italics, it is a defective Money Resolution, and, therefore, I ask you, Mr. Deputy Speaker, whether it would not be proper for the Money Resolution to be withdrawn, since it entails powers which, on examination, are not found to be printed in italics, thereby preserving the prerogative of the House of Commons solely to control the voting of Supply.

Mr. Deputy Speaker: The hon. Gentleman will have noticed that there is part of the Bill which is printed in italics. The Money Resolution applies to that part of the Bill.

Mr. Maxwell-Hyslop: I have noticed that, Mr. Deputy Speaker. I have no complaints about the powers in Clause 3 which are covered by the Money Resolu-

tion. "Erskine May" states that all clauses which create a charge must be printed in italics. It is not good enough that one clause in the Bill is printed in italics when the Money Resolution extends to other clauses which are not in italics.
The point which I have put to you, Mr. Deputy Speaker, is supported in "Erskine May", not, as you have rightly said, with respect to Clause 3—about which I lodge no complaint. The last line in the Money Resolution is covered not by Clause 3 but by Clause 5.
On pages 3 and 4 the Bill reads:
As the price for the ordinary stock of the Company vested in the Board by virtue of section 4 (Vesting in Board of ordinary stock of Company) of this Act the Board shall, subject to the provisions of subsections (3) and (5) of this section, forthwith after the appointed day pay to the persons holding the ordinary stock units of the Company immediately before the appointed day, being the persons then registered in the Company's register of stockholders, the sum of £1·50 for each stock unit so held.
Because that reference to subsection (3) is not printed in italics, it would be open to the House of Lords to substitute £1 million for £1·50, in which case a major charge on public funds would be created. No one can deny that that is at variance with the advice in "Erskine May." "Erskine May" gives advice and is not part of our Standing Orders, but it is a major point of privilege that the House does not give a right to increase a charge on public funds to the Lords.
Unless Clause 5 is in italics, it would be amended in the Lords to increase the charge on public funds. Mr. Deputy Speaker, I submit that it is your clear duty not to allow the Question to be put on a Money Resolution which is in breach of the privilege of the House of Commons.

Mr. Deputy Speaker: It may be of assistance to the hon. Member and to the House if I express the view that what is not in italics does not, in fact, extend the powers of another place and, therefore, as part of the Bill is in italics, that part is the one which is covered by the Money Resolution.

Mr. Maxwell-Hyslop: That does not happen to be what the Bill says, nor does it happen to be what the Money


Resolution says. The Money Resolution covers:
vesting in the Board the share capital of the Felixstowe Dock and Railway Company.

Mr. Deputy Speaker: I have heard what the hon. Gentleman has said and I have contributed what I can. If any further time is spent on this point of order there will be no answer from the Minister.

Mr. Maxwell-Hyslop: The Minister is not responsible for maintaining the privilege of the House. That is the responsibility of the Chair. The Chair has not explained how the House of Lords is prevented from increasing the charge on public funds which is not printed in italics on page 4.
If the Money Resolution is allowed to be put to the House and accepted, the privilege of the Commons to control supply is abrogated and a charge is potentially placed on public funds by amendment in another place. The whole purpose of the italics rule is to prevent that. That is not a matter for a Minister to reply to. A Minister is not responsible for maintaining the privilege of the House of Commons.

Mr. Deputy Speaker: What is in italics is there to draw the attention of the House to matters which hon. Members should have their attention directed to. It does not affect the powers of the House of Lords.

Mr. Maxwell-Hyslop: This is exactly why Bills which originate in the House of Lords and which abrogate the privilege of the Commons, in that they impose charges, must have printed in italics those clauses which do so. They are deleted from the Bill by the Lords before they give a Third Reading to the Bill. It is not just to draw attention—

Mr. Deputy Speaker: Order. This is a House of Commons Bill. If the hon. Gentleman were dealing with a Bill from the other place, there might be something in what he says.

Mr. Maxwell-Hyslop: I am well aware that the Bill originates in the House of Commons, Mr. Deputy Speaker, but we are discussing a Money Resolution which, if it is passed, will activate—that is the word used in "Erskine May"—a clause which is not printed in italics. This House

must not by its own rules of privilege pass a Money Resolution activating a clause which imposes a charge but which is not printed in italics. That is the clear precedent. If you rule otherwise, Mr. Deputy Speaker, you will establish a new precedent depriving the House of Commons of the power, unique as between the two Houses, to control Supply. You will be creating a precedent of which I should have thought some hon. Members below the Gangway on the Labour Benches would strongly disapprove.

The Minister for Transport (Dr. John Gilbert): Further to the point of order, Mr. Deputy Speaker. As I understand it, Clause 5 does not need to be in italics because it provides for payment by the British Transport Docks Board for the company, and as the Board is finding the money from its own resources no special money needs to be voted by the House for it or approved by Money Resolution.

10.44 p.m.

Mr. Russell Fairgrieve: In 40 seconds I should like to put four quick questions on the Money Resolution, the purpose of which some of us think to be merely to advance the cause of doctrinaire Socialism.
Does the taxpayer benefit by what is proposed? Do the users of the dock benefit? Do the workers in the dock benefit? Do the owners of the dock benefit? Nobody benefits by it.
In other words, the whole point of the Bill is irrelevant, and the Money Resolution should be defeated.

Mr. Patrick Mayhew: On a point of order, Mr. Deputy Speaker. The Minister's contribution is blown out of the water by the terms of Clause 3(1), which is partly printed in italics and relates to
powers, duties and obligations of the Board ".
If it is properly thought necessary by the draftsmen to put that in italics, why is it not necessary for Clause 5 to be in italics?

10.45 p.m.

Sir David Renton: I think that perhaps the Minister might be able to help us further in the light of his experience as a former Financial Secretary to the Treasury. He will correct me if I am wrong, but it is my understanding that ever since financial matters


were taken away from the competence of the House of Lords by the Parliament Act 1911 it has been not only customary but a rule of this House that legislation going from this House to another place shall be put in italics when there is a charge on public funds. The reason for that is, first, as a warning—a red light, if hon. Members opposite prefer that term—and, secondly, in order to make it perfectly clear that the matter is vetoed from alteration by another place under the Parliament Act.
The Minister, in support of your ruling, Mr Deputy Speaker, has argued—I would be grateful if you would consider whether his argument was sound, because I have some doubts—that the provision of funds by the Docks Board out of its own funds is not a charge on public funds.
I do not know where one finds the definition of "public funds", but I can say that the Estimates Committee, the Expenditure Committee and the former Public Accounts Committee, round which so many of the rules in this matter were built, took it upon themselves to look into the accounts of all kinds of public bodies because of the use of the expression, which brought it within their terms of reference, that these public bodies were handling "public funds".
In other words, italics need to be used not merely where there is a charge directly upon the taxpayer through the Exchequer, but also where there is a charge on public funds. We know that the nationalised industry in this case is able to resort to the Exchequer, and does, for a fair amount of its capital expenditure. If I am wrong about that, I concede the point. But it seemed to me in the hon. Gentleman's intervention that he may have taken too narrow a view of the expressions "public funds" and "charge upon public funds".

Mr. Ridley: On a point of order, Mr. Deputy Speaker. I submit that what the Minister told us must be wrong because, as my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) said, if in another place their Lordships were to remove the sum of £1·50 from Clause 5 and substitute, say, the sum of £15, a charge in the region of £50 million would

fall upon the taxpayer. The Docks Board, with all its over-liquidity and because of its unprofitability, would not be able to find the sum of £50 million, and would have to come back to the Exchequer to borrow under the National Loans Fund provisions and this Money Resolution. There would be no doubt that the charge would fall upon public funds if their Lordships were to amend Clause 5.
I therefore formally move that the promoters of this Bill be referred to the Select Committee on Privileges as causing a breach of the privileges of this House. I therefore ask you to adjourn the debate and to rule tomorrow as to whether in your judgment it is right that they should appear before the Committee of Privileges for a breach of privilege.

Mr. Deputy Speaker: I am not prepared to accept that motion.

Mr. Maxwell-Hyslop: Further to the point of order, Mr. Deputy Speaker. I referred to "Erskine May", which is advisory. A further examination of "Erskine May" has elicited Standing Order No. 168 of the Standing Orders for Private Business. It is binding upon the Chair and is in no way discretionary. The side heading reads
Charges affecting public revenue to be printed in italics".
The Standing Order itself reads
Subject to the provisions of Standing Order 156A (Modification of practice as to charges on public revenue) all charges in any way affecting the public revenue, which occur in the clauses of any private bill, shall be printed in italics in the bill when presented to the House.
We find that Standing Order No. 156A has nothing whatever to do with this matter and, therefore, does not modify it. That Standing Order reads
In the case of a private bill, it shall not be necessary to comply with the standing orders and practice of this House relating to provisions authorising charges upon the public revenue, by reason only that the Bill contains provisions authorising expenditure by a local authority which would or might operate to increase the sums payable by way of Rate Support Grant under the enactments relating to local government in England and Wales or in Scotland.
I submit, therefore, that it is not within the discretion of the Chair to waive the provision of Standing Order No. 168 which controls the Money Resolution on a Private Bill.

Dr. Gilbert: Further to that point of order, Mr. Deputy Speaker. It might be helpful for me to remind the House that under Standing Order No. 89 expenditure to be a charge on public funds must be payable out of either the Consolidated Fund or the National Loans Fund.

Mr. Maxwell-Hyslop: Further to that point of order, Mr. Deputy Speaker. That in no way nullifies Standing Order No. 168. The only question that arises is whether Clause 5 constitutes an imposition of a charge against public funds. Clearly it can. It affects public revenue, and it cannot be seriously contended that if Clause 5 is amended in the way to which I alluded earlier an increased charge on public funds may not arise. This is, therefore, a clear case where Standing Order No. 168 applies and must govern the Money Resolution.

Mr. Deputy Speaker: Order. I have listened to all that hon. Gentlemen have said. I am perfectly satisfied that the Bill has been italicised in the correct manner.

Mr. Timothy Raison: Further to that point of order, Mr. Deputy Speaker. It seems to me that there is considerable confusion here. As my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) has pointed out, subject to the provisions of Standing Order No. 156A all charges in any way affecting public revenue in Private Bills shall be printed in italics. With great respect, I fail to see how this Bill cannot affect the public revenue. I suggest that the proper course would be for the Minister to withdraw the Money Resolution and think again.

Mr. Deputy Speaker: I have looked at the Standing Orders and listened to what the hon. Gentleman said. I have nothing to add to what I have already said.

Mr. Lane: Further to that point of order. With respect, Mr. Deputy Speaker, and meaning no disrespect to the Minister for Transport, would it not be helpful, before we proceed further, to have the presence and advice of a Minister from the Treasury as public expenditure is involved?

Mr. Deputy Speaker: That is not a point of order for me.

The Question is as on the Order Paper—

Hon. Members: No.

Sir John Eden: With respect, Mr. Deputy Speaker, although you have given your ruling on this matter, I think that it would be extremely helpful if you gave a brief explanation to the House. A reasoned case, as I am sure you will agree, has been made in relation to a Standing Order of this House. Therefore, I think it right that, where confusion exists, you should explain how your ruling is sustained by Standing Orders. Is it possible for you to explain briefly how your ruling falls within Standing Orders? My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) has carefully brought chapter and verse to sustain his case, which has made a considerable impact on hon. Members on both sides of the House. [Interruption.] It is clear that this matter should not be steamrollered out of the way. It merits a proper explanation as to how the case presented by my hon. Friend should not be held to rule at this time.

Mr. Deputy Speaker: I have listened to all that has been said and done my best to explain my view. I have given my ruling that the Bill is correctly drafted.

Mr. Keith Stainton: Further to that point of order, Mr. Deputy Speaker—

Hon. Members: It is not a point of order.

Mr. Stainton: We are starting a new point of order. Is that correct, Mr. Deputy Speaker? I wonder whether my hon. Friends are happy with that terminology—that we are starting a new point of order.
I find myself utterly confused and disturbed. A very reasoned argument has been put before you, Mr. Deputy Speaker. Admittedly, it has been put at some length and perhaps it might have been better had it been put more shortly. However, my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) took pains to describe his viewpoint to you with great consistency and humility. Therefore, I can only repeat my perturbation regarding your ruling. A mere—

Mr. Deputy Speaker: Order. Hon. Members who are familiar with Standing Orders will know that it is now my duty to put the Question as on the Order Paper.

Several Hon. Members: Several Hon. Members rose—

It being three quarters of an hour after the commencement of the proceedings on the Motion, Mr. DEPUTY SPEAKER put the Question pursuant to Standing Order No. 3 (Exempted Business).

Hon. Members: No.

Mr. Deputy Speaker: As many as are of that opinion say "Aye"?

Hon. Members: Aye.

Mr. Deputy Speaker: To the contrary "No".

Hon. Members: No.

Mr. Deputy Speaker: I think the Ayes have it.

Hon. Members: No.

Mr. Deputy Speaker: Clear the Lobbies.

The House proceeded to a Division—

Several Hon. Members: Several Hon. Members rose—

Mr. Norman Fowler(seated and covered): On a point of order Mr. Deputy Speaker—

Mr. Ridley (seated and covered): On a point of order, Mr. Deputy Speaker—

Mr. Deputy Speaker: Order. I have put the Question and ordered the Lobbies to be cleared.

Hon. Members: No.

Mr Ian Gow(seated and covered): On a point of order, Mr. Deputy Speaker. This is a serious issue concerning the rights of this House and of another place. Is it not in accordance with the traditions of this House that before a Division takes place you should give a reason for the decision you have given?

Mrs. Elaine Kellet-Bowman(seated and covered): On a point of order—

Mr. Deputy Speaker: May I deal with one point of order at a time? Standing

Orders make it quite clear that I have to put the Question at the time I did put the Question. Therefore, there is no other procedure than for us to have a Division.

Mrs. Keilett-Bowman (seated and covered): With all due respect to you, Mr. Deputy Speaker, I submit that you did not put the Question, but only ordered "Clear the Lobbies".

Mr. Deputy Speaker: Perhaps if there was a little less noise it would be possible to hear what was going on. At the moment I am trying to take the names of the Tellers.

Mr. Norman Fowler (seated and covered): On a point of order—

Hon. Members: On a point of order—

Mr. Deputy Speaker: The Question is as on the Order Paper. As many of that opinion say "Aye", to the contrary "No". Ayes to the right, Noes to the left. Tellers for the Ayes, Mr. Walter Johnson and Mr. Cryer. Tellers for the Noes, Mr. Jopling and Mr. Shelton.

Mr. Norman Fowler (seated and covered): On a point of order. With all due respect, Mr. Deputy Speaker, the House is in some difficulty, not having had a reply to the point put by my hon. Friend. That is to say, that no explanation has been given of your ruling. With due respect, it is extremely difficult to come to a conclusion without that ruling being given before a vote takes place.

Mr. Deputy Speaker: I had in fact heard everything said and took it into consideration in giving my ruling. Under Standing Orders, the Question must be put at the time I put the Question. I had no alternative but to put the Question.

Mr. Maxwell-Hyslop (seated and covered): On a point of order, Mr Deputy Speaker. Standing Orders certainly do not provide that you shall put the Question on a motion which is itself out of order because it is in breach of privilege. Therefore, surely, the Question must not be put until you have finished taking points of order on whether the motion is within order and can or cannot be put to the House.

Mr. Deputy Speaker: I have ruled on the point the hon. Member puts to me.


It is clearly laid down in Standing Orders that the Question must be put three-quarters of an hour after the business started.

Mr. Maxwell-Hyslop (seated and covered): Further to the point of order. My hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) was addressing you, Mr. Deputy Speaker, on a new point of order, about the validity of the motion which is now purported to be before the House. Surely you must hear such points of order, particularly when the motion is apparently in defiance of Standing Order No. 168, before the Question is put.

Mr. Deputy Speaker: The hon. Member is wrong. The Standing Order makes

it clear that the Question must be put at a certain time, and that is what I did.

Mr. Maxwell-Hyslop (seated and covered): Further to the point of order, Mr. Deputy Speaker. It has not been determined, until you have finished taking points of order, that there is a valid motion to put to the House pursuant to the Standing Order you quoted. As the motion is apparently in breach of Standing Order No. 168, that matter must be properly determined before you put the Question.

Mr. Deputy Speaker: I had already given a ruling on that matter. We then proceeded to a Division, in accordance with Standing Orders.

The House having divided: Ayes 223, Noes 179.

Division No. 99.]
AYES
[11.00 p.m.


Anderson, Donald
Dormand, J. D.
Jones, Alec (Rhondda)


Archer, Peter
Douglas-Mann, Bruce
Jones, Barry (East Flint)


Armstrong, Ernest
Duffy, A. E. P.
Jones, Dan (Burnley)


Ashton, Joe
Dunn, James A.
Judd, Frank


Atkinson, Norman
Dunnett, Jack
Kelley, Richard


Bagier, Gordon A. T.
Eadie, Alex
Kerr, Russell


Barnett, Guy (Greenwich)
Edge, Geoff
Lamborn, Harry


Barnett, Rt Hon Joel (Hey wood)
Ellis, John (Brigg &amp; Scun)
Lamond, James


Bates, Alt
Ennals, David
Latham, Arthur (Paddington)


Bean, R. E.
Evans, Fred (Caerphilly)
Lestor, Miss Joan (Eton &amp; Slough)


Bennett, Andrew (Stockport N)
Evans, loan (Aberdare)
Lewis, Ron (Carlisle)


Bidwell, Sydney
Ewing, Harry (Stirling)
Lipton, Marcus


Bishop, E. S.
Faulds, Andrew
Loyden, Eddie


Blenkinsop, Arthur
Fernyhough, Rt Hon E.
Luard, Evan


Boardman, H.
Flannery, Martin
Lyons, Edward (Bradford W)


Bottomley, Rt Hon Arthur
Fletcher, Raymond (Ilkeston)
Mabon, Dr J. Dickson


Boyden, James (Bish Auck)
Fletcher, Ted (Darlington)
McCartney, Hugh


Bradley, Tom
Foot, Rt Hon Michael
McElhone, Frank


Bray, Or Jeremy
Ford, Ben
McGuire, Michael (lnce)


Brown, Hugh D. (Proven)
Forrester, John
Mackenzie, Gregor


Brown, Robert C. (Newcastle W)
Fowler, Gerald (The Wrekin)
Maclennan, Robert


Buchan, Norman
Fraser, John (Lambeth, N'w'd)
McMillan, Tom (Glasgow C)


Buchanan, Richard
Freeson, Reginald
McNamara, Kevin


Callaghan, Jim (Middleton &amp; P)
Garrett, John (Norwich S)
Madden, Max


Canavan, Dennis
George, Bruce
Magee, Bryan


Cant, R. B.
Gilbert, Dr John
Maguire, Frank (Fermanagh)


Carmichael, Nell
Golding, John
Mahon, Simon


Carter, Ray
Gould, Bryan
Mallalieu, J. P. W.


Cartwright, John
Gourlay, Harry
Marks, Kenneth


Castle, Rt Hon Barbara
Graham, Ted
Marquand, David


Clemitson, Ivor
Grant, George (Morpeth)
Marshall, Dr Edmund (Goole)


Cocks, Michael (Bristol S)
Grant, John (Islington C)
Maynard, Miss Joan


Cohen, Stanley
Grocott, Bruce
Meacher, Michael


Coleman, Donald
Hamilton, James (Bothwell)
Mellish, Rt Hon Robert


Colquhoun, Ms Maureen
Harper, Joseph
Mikardo, Ian


Concannon, J. D.
Harrison, Walter (Wakefield)
Millan, Bruce


Conlan, Bernard
Hart, Rt Hon Judith
Miller, Dr M. S. (E Kilbride)


Cook, Robin F. (Edin C)
Hattersley, Rt Hon Roy
Miller, Mrs Millie (Ilford N)


Corbett, Robin
Healey, Rt Hon Denis
Mitchell, R. C. (Soton, ltchen)


Cox, Thomas (Tooting)
Heffer, Erle S.
Morris, Alfred (Wythenshawe)


Cralgen, J. M. (Maryhill)
Horam, John
Morris, Charles R. (Openshaw)


Crosland, Rt Hon Anthony
Hoyle, Doug (Nelson)
Morris, Rt Hon J. (Aberavon)


Cunningham, Dr J. (Whiten)
Hughes, Rt Hon C. (Anglesey)
Moyle, Roland


Dalyell, Tam
Hughes, Mark (Durham)
Mulley, Rt Hon Frederick


Davidson, Arthur
Hughes, Robert (Aberdeen N)
Murray, Rt Hon Ronald King


Davies, Bryan (Enfield N)
Hunter, Adam
Newens, Stanley


Davis, Clinton (Hackney C)
Irvine, Rt Hon Sir A. (Edge Hill)
Noble, Mike


Deakins, Eric
Jackson, Colin (Brighouse)
Oakes, Gordon


Dean, Joseph (Leeds West)
Jackson, Miss Margaret (Lincoln)
Ogden, Eric


Delargy, Hugh
Janner, Greville
Orbach, Maurice


Dell, Rt Hon Edmund
Jenkins, Hugh (Putney)
Ovenden, John


Dempsey, James
John, Brynmor
Park, George


Doig, Peter
Johnson. James (Hull West)
Parry, Robert




Pavitt, Laurie
Shore, Rt Hon Peter
Walden, Brian (B'ham, L'dyw'd)


Peart, Rt Hon Fred
Short, Rt Hon E. (Newcastle C)
Walker, Terry (Kingswood)


Pendry, Tom
Silkin, Rt Hon John (Deptford)
Ward, Michael


Phipps, Dr Colin
Silkin, Rt Hon S. C. (Dulwich)
Watkins, David


Prentice, Rt Hon Reg
Silverman, Julius
Weetch, Ken


Prescott, John
Skinner, Dennis
Wellbeloved, James


Price, C. (Lewisham W)
Small, William
White, Frank R. (Bury)


Price, William (Rugby)
Snape, Peter
Whitehead, Phillip


Radice, Giles
Spearing, Nigel
Whitlock, William


Rees, Rt Hon Merlyn (Leeds S)
Spriggs, Leslie
Williams, Alan (Swansea W)


Richardson, Miss Jo
Stallard, A. W.
Williams, Alan Lee (Hornch'ch)


Roberts, Albert (Normanton)
Stewart, Rt Hon M. (Fulham)
Wilson, Alexander (Hamilton)


Roderick, Caerwyn
Stoddart, David
Wilson, William (Coventry SE)


Rodgers, George (Chorley)
Stott, Roger
Wise, Mrs Audrey


Rodgers, William (Stockton)
Strang, Gavin
Woodall, Alec


Rooker, J. W.
Summerskill, Hon Dr Shirley
Woof, Robert


Rose, Paul B.
Taylor, Mrs Ann (Bolton W)
Wrigglesworth, Ian


Ross, Rt Hon W. (Kilmarnock)
Thomas, Ron (Bristol NW)
Young, David (Bolton E)


Rowlands, Ted
Thorne, Stan (Preston South)



Sedgemore, Brian
Tierney, Sydney
TELLERS FOR THE AYES:


Selby, Harry
Tinn, James
Mr. Walter Johnson and


Shaw, Arnold (Ilford South)
Torney, Tom
Mr. Bob Cryer.


Sheldon, Robert (Ashton-u-Lyne)
Tuck, Raphael





NOES


Adley, Robert
Gilmour, Sir John (East Fife)
Morgan-Giles, Rear-Admiral


Aitken, Jonathan
Glyn, Dr Alan
Morrison, charles (Devizes)


Alison, Michael
Goodhart, Philip
Mudd, David


Atkins, Rt Hon H. (Spelthorne)
Goodhew, Victor
Neave, Airey


Baker, Kenneth
Goodlad, Alastair
Nelson, Anthony


Banks, Robert
Gow, Ian (Eastbourne)
Newton, Tony


Beith A. J.
Gray, Hamish
Normanton, Tom


Bennett Dr Reginald (Fareham)
Grimond, Rt Hon J.
Onslow, Cranley


Benyon, W.
Grist, Ian
Page, John (Harrow West)


Berry, Hon Anthony
Grylls, Michael
Page, Rt Hon R. Graham (Crosby


Bitten, John
Hall-Davis, A. G. F.
Parkinson, Cecil




Pattie, Geoffrey


Biggs-Davison, John
Hamilton, Michael (Salisbury)
Percival, Ian


Blaker Peter
Hampson, Dr Keith



Body, Richard
Hannam, John
Powell, Rt Hon J. Enoch


Boscawen, Hon Robert

Prior, Rt Hon James


Bottomley Peter
Harrison, Col Sir Harwood (Eye)



Boyson, Dr Rhodes (Brent)
Harvie Anderson, Rt Hon Miss
Pym, Rt Hon Francis


Braine, Sir Bernard
Hastings, Stephen
Raison, Timothy



Havers, Sir Michael



Brocklebank-Fowler, C.
Heseltine, Michael
Rathbone, Tim


Brotherton, Michael
Higgins, Terence L.
Rees-Davies, W. R.




Renton, Rt Hon Sir D. (Hunts)


Brown, Sir Edward (Bath)
Holland, Philip
Rhys Williams, Sir Brandon


Bryan, Sir Paul
Hordern, Peter
Ridley, Hon Nicholas


Buchanan-Smith, Alick
Howe, Rt Hon Sir Geoffrey
Rifkind, Malcolm


Budgen, Nick
Howell, David (Guildford)
Roberts, Michael (Cardiff NW)


Bulmer, Esmond
Hunt, David (Wirral)
Roberts, Wyn (Conway)


Butler, Adam (Bosworth)
Hutchison, Michael Clark
Ross, Stephen (lese of William)


Carlisle, Mark
Irving, Charles (Cheltenham)
Ross, William (Londonderry)


Chalker, Mrs Lynda
James, David
Roosi, Hugn (Hornsey)


Clark, Alan (Plymouth, Sutton)
Johnson Smith, G. (E Grinstead)
Scott-Hopkins, James


Clark, William (Croydon S)
Jones, Arthur (Daventry)
Shaw, Giles (Pudsey)


Clarke, Kenneth (Rushcliffe)
Joseph, Rt Hon Sir Keith
Shepherd, Colin


Clegg, Walter
Kellett-Bowman, Mrs Elaine
Silvester, Fred


Cooke, Robert (Bristol W)
Kimball, Marcus
Sims, Roger




Smith, Cyril (Rochdale)


Cope, John
King, Tom (Bridgwater)
Skeet, T. H. H.


Cormack, Patrick
Kitson, Sir Timothy
Smith, Cyril (Rochdale)


Corrie, John
Lamont, Norman
Smith, Dudley (Warwick)


Costain, A. P.
Lane, David
Speed, Keith


Crouch, David

Sinclair, Sir George


Davies, Rt Hon J. (Knutsford)
Langford-Holt, Sir John
Spicer, Jim (W Dorset)


Dean, Paul (N Somerset)
Latham, Michael (Melton)
Spicer, Michael (S Worcester)


Dodsworth, Geoffrey
Lawrence, Ivan
Sproat, lain


Douglas-Hamilton, Lord James
Le Marchant, Spencer
Stanbrook, Ivor


du Cann, Rt Hon Edward
Lester, Jim (Beeston)
Stanley, John


Durant, Tony
Loveridge, John
Steel, David (Roxburgh)


Eden, Rt Hon Sir John
Luce, Richard
Steen, Anthony (Wavertree)


Edwards, Nicholas (Pembroke)
Macfarlane, Neil
Stradling Thomas, J.


Elliott, Sir William
MacGregor, John
Taylor, Teddy (Cathcart)


Emery, Peter
McNair-Wilson, M. (Newbury)
Thatcher, Rt Hon Margaret


Eyre, Reginald
Marten, Neil
Thomas, Rt Hon P. (Hendon S)


Fairgrieve, Russell
Mather, Carol
Trotter, Neville


Fell, Anthony
Maude, Angus
Tugendhat, Christopher


Finsberg, Geoffrey
Maxwell-Hyslop, Robin
van Straubenzee, W. R.


Fookes, Miss janet
Mayhew, Patrick
Vaughan, Dr Gerard


Forman, Nigel
Miscampbell, Norman
Viggers, Peter


Fowler, Norman (Sutton C'f'd)
Moate, Roger
Wainwright. Richard (Colne V)


Fox, Marcus
Monro, Hector
Walder, David (Clitheroe)


Fry, Peter
Montgomery, Fergus
Walker Rt Hon P.(Worcester)


Gardiner, George (Reigate)
More, Jasper (Ludlow)
Wall, Patrick







Weatherill Bernard
Wiggin, Jerry
TELLERS FOR THE NOES:


Wells, John
Winterton, Nicholas
Mr. Michael Jopling and


Whitelaw, Rt Hon William
Young, Sir G. (Ealing, Acton)
Mr. William Shelton

Question accordingly agreed to.

Resolved,
That it is expedient to authorise all such increased payments into and out of the Consolidated Fund and the National Loans Fund as may result, under sections 19 to 21 of the Transport Act 1962 (borrowing by the British Transport Docks Board and other Boards; loans by the Secretary of State and Treasury guarantee of Boards' other borrowing) from an Act of the present Session extending the powers and duties of the British Transport Docks Board with respect to the Port of Felixstowe and vesting in the Board the share capital of the Felixstowe Dock and Railway Company.

Mr. Maxwell-Hyslop: On a point of order, Mr. Deputy Speaker. Do you intend to order it to be entered in the Journal of the House that Standing Order No. 168 concerning Private Business has now been suspended, since it has clearly been abrogated?

Mr. Deputy Speaker: I have nothing to add to what I have already said.

BP CHEMICALS INTERNATIONAL LIMITED

11.14 p.m.

The Under-Secretary of State for Industry (Mr. Neil Carmichael): I beg to move,
That this House authorises the Secretary of State to pay, or undertake to pay, by way of financial assistance under section 8 of the Industry Act 1972, as amended by section 22 of, and Part I of Schedule 4 to, the Industry Act 1975, in respect of the construction of an acetic acid plant at Hull by BP Chemicals International Limited sums exceeding £5,000,000 but not exceeding £10,140,000.
The House will recall that my right hon. Friend the Chancellor of the Exchequer introduced last year new measures to stimulate investment and improve the balance of payments. The accelerated projects scheme provides special assistance to encourage companies to go ahead with new investment and modernisation projects. The assistance is provided under Section 8 of the Industry Act 1972. The approval of the House is required before assistance of more than £5 million is granted for any one project. I am inviting the House to authorise the Secretary of State for Industry to provide a grant or not more

than £10,140,000 to BP Chemicals International Ltd. towards the cost of an acetic acid plant at Hull. BPCI is a wholly-owned subsidiary of British Petroleum.
This is the first time the House has been asked to approve assistance under the accelerated projects scheme. The purpose of the scheme is to generate additional spending on capital equipment during the current recession. We are helping companies to go ahead with sound investment and modernisation projects, using the powers to make grants and loans offered under the Industry Act.
This scheme is proving to be most effective. It adds to the orders for capital goods at a time when there are unused resources because demand is slack. The capital goods industries always suffer most when investment falls during a recession. As a result, capacity is underutilised, output is lost, and men are made redundant. Many firms tend to be reluctant to invest during a recission and, in order to conserve their liquidity, they are particularly cautious in undertaking large and additional financial commitments. With this scheme we are able to reduce some of these concerns by making available grants or loans at reduced rates of interest, and many companies have reconsidered their investment programmes with a view to advancing new projects that would otherwise have been delayed.
All proposals are examined carefully in accordance with the criteria for selective assistance. In particular, to qualify for consideration, projects must be within the companies' planned capital expenditure programme, they must be shown to be projects that would be deferred if no accelerated projects assistance was forthcoming, they must be commercially sound, and make a contribution to improving the balance of payments, and they should cost more than £500,000.
The scheme has been very well received, and there has been a very good response from industry. To date, the Industrial Development Advisory Board has advised that financial assistance of nearly £31 million should be made


available towards 21 projects with a total cost of some £190 million. We estimate that these projects should lead to a balance of payments gain of about £170 million per annum in foreign exchange by 1980. They cover a broad range of geographical locations, and will help expand capacity across a wide spectrum of industry—in, for example, the diesel engine, chemical, pharmaceutical, food processing, and electrical and mechanical engineering industries. Many other projects are under consideration at the moment which could involve investment of the order of £500 million and a correspondingly large contribution to the balance of payments.
This proposal from BP for an acetic acid plant at Hull is an excellent example of how the scheme is helping the economy. The capital cost of the project, excluding working capital, is budgeted to cost £50 million, and BP has had to defer it several times already. The BP parent company faces heavy commitments in its activities in the North Sea and in Alaska, and BPCI already faces commitments in other chemical projects costing over £100 million. Like most firms, its operations are generally under pressure in the present difficult financial circumstances. Consequently, the project would be subject to further postponement. But, with the help of the grant now proposed, the Government can help to get it under way this year.
BP already produces acetic acid from its complex at Hull and the new plant will benefit from close contact with the expertise and facilities already in the area. The new facility will increase capacity from 190,000 tonnes to 340,000 tonnes by 1980. Acetic acid is an essential factor in the production of textiles and paints and is also used for the manufacture of industrial solvents, herbicides, adhesives and pharmaceuticals. By 1980 increased exports of acetic acid are expected to be earning some £20–£30 million in foreign exchange. This location of additional capacity in the United Kingdom will also provide greater security of supply for United Kingdom buyers, and bring import savings and further benefits to the balance of payments.
This plant will be one of the largest items of capital investment for Humberside in recent years. It will consolidate Humberside's strong position in the petro-chemical and chemical industries.
The Hull site is also ideally situated to use natural gas from BP's West Sole Field as a raw material for the new plant. The gas would be transported through the British Gas Corporation pipeline, and the British Transport Docks Board jetty facilities at Salt End, Hull, would have the capacity to cover the export shipments of the acetic acid produced.
The project will create in due course some 140 permanent direct new jobs in the Hull travel-to-work area. Over the next three years construction of the plant will involve 700 jobs, for most of which the company plans to recruit locally. There will, in addition, be a useful spin-off in local service employment, of both a temporary and a long-term nature. All these benefits would be most welcome to the Hull area. Also, the bulk of the equipment for the project will be purchased from British suppliers, including the British Steel Corporation, and such purchases should provide a useful general stimulus to activity and employment.
This is the second major investment project under this scheme to be located on Humberside. The first, announced a few weeks ago, is the construction of a major new pharmaceutical factory in Hull by Reckitt & Colman. This will lead to many local construction jobs and, as the facilities are established, over 100 new permanent direct jobs. These developments and the new motorway communications now coming in should strengthen the industrial base of Humberside.
In asking the House to approve the assistance proposed for this project, I would, therefore, particularly commend its value to the petro-chemical capability of the country, its significant contribution to the balance of payments, its wide-ranging employment benefits, and its special contribution to the industrial structure of Humberside.

11.23 a.m.

Mr. Tom King: This is a debate of considerable importance for the


House, and it goes rather wider than the motion before us. This is the first opportunity of discussing the accelerated investment scheme to which the Chancellor of the Exchequer has allocated £120 million of public money. It is only because this Order trips the £5 million procedure under the Industry Act 1972 that we are able to consider one of the schemes coming forward under this proposal. I invite the Minister to give us more information about the scheme.
I trust there is no division in the House on the fact that there is an acute need for greater investment in industry and on the importance of that investment to create wealth. We should realise that it is only by the efforts of our industry that we shall solve our acute economic problems. It will certainly not be done by the wasteful expenditure of public money we saw earlier in a measure which will bring no additional benefit to the country and no additional port facilities to Felixstowe. That was a classic example of money being spent for no additional benefit.
This scheme is a different animal. It involves public money and we must scrutinise it carefully, but it has certain features which commend it more to my hon. and right hon. Friends than did any of the Government's earlier measures. I understand that BP will put up between £40 million and £45 million for the project. Although the payment is couched in terms of being not more than £10,140,000, I understand that it will be that amount. It is an interest relief grant and will not be paid before 1978, when the main progress payments become due.
There are several criteria for accelerated investment schemes, one of which is the creation of employment. It is sobering to realise that the expenditure of £10 million of Government money will produce 140 permanent jobs. For my figure of 100 jobs, the cost would be £100,000 per job created. Admittedly, up to 1,000 jobs will be created during the three or four years of construction. That is an extremely high price to pay. It is a measure of the capital-intensivity of the project that the total cost of £35 million will produce 140 jobs. Those who believe that massive investment will solve the unemployment problem will ponder on those figures and realise that it is no solution.
Will the Minister confirm that the project is subject to planning approval and to the approval of the main board of BP and has received only interim approval.
What interests us is how the Government arrived at what is in effect a 20 per cent grant. Is it based on the original development grant? How did they arrive at the formula? I understand that £32 million has already been allocated to the accelerated investment scheme covering £200 million worth of investment projects. The Minister quoted Reckitt & Colman. Ransome Hoffman Pollard and Lucas have also taken advantage of the scheme. How genuine are the schemes what tests are applied? I question whether the schemes would have gone ahead anyway. How did the Department, the Treasury and the European Commission satisfy themselves that the project would not otherwise have gone forward without assistance?
The Chancellor of the Exchequer refers to the scheme as his 6:1 multiplier. If he allocates a £120 million grant he looks for over £700 million of accelerated investment. According to a Press report, BP did not go ahead with the project before and did not intend to go ahead with it now because of poor market conditions. Will the Under-Secretary of State confirm that that is incorrect? Is the Department's understanding that the present plant operates profitably and has orders in excess of its capacity and that market conditions look extremely encouraging? It is important that we should not consider this project in any sense as having been pursued for non-commercial reasons, but should know clearly the basis on which it has been pursued.
This is a measure of considerable importance and substance. It looks as though it has identified a product area with considerable potential. There may also be considerable opportunities for exports to Europe. Against that background, it would seem to be one area where investment is well justified.
At the same time, in looking at the time scale of what we are trying to do with accelerated investment—and the fact that the plant will provide very little permanent employment and have very little effect before 1980—I shall be interested to hear whether the other accelerated investment schemes put forward


are likely to have rather greater employment results and rather earlier prospects of a real effect on the economy.

11.32 p.m.

Mr. James Johnson: After the pseudo-pantomime of the last hour or so I have no intention of detaining the House for very long. I may even make a parochial speech by comparison with that of the hon. Member for Bridgwater (Mr. King).
Speaking as a burgess of the city of Kingston upon Hull, I greatly welcome the proposal, which will mean a great deal to us in the difficult conditions on North Humberside.
By a happy coincidence, it coincides with a deputation today from the city of Hull, led by Councillors Schultz and Pearlman, to tell Yorkshire Members of Parliament of their difficulties on Humberside. The outlook there is very bleak, particularly in Hull itself, where employment was never good. It is worsening now. Male unemployment is running at 10·6 per cent. I cannot imagine that any area is in a much worse situation. There is a steady decline in fishing and in shipbuilding.
Over the years, each wave of unemployment seems to have made the next wave of unemployment worse. Great concern is felt by our local authorities and our business community. Despite the M62, the Ml8, and the Humber Bridge, which is to come in two years' time, there is still a malaise, and a shot in the arm of the sort proposed will help our people locally to feel that they are not quite forgotten. We want development area status but apparently it is not easy to get at the present time. The action of BP and of the Government may help to dispel some of the malaise.
Selective assistance of this kind is ideal for us. I listened to what was said about capital-intensive industry. We need jobs, because we are losing them right, left and centre. We have lost jobs with Imperial Typewriters and the Humber St. Andrew's Engineering Company. We are being hit in this way all the time. Our people are getting very worried about it.
I am told that the proposed extension will create about 150 permanent jobs. It will significantly enhance the total capacity

of the company, which I understand is possibly the largest in Western Europe. The company has provided some stability of both employment and financial input. Despite the waves of unemployment constantly hitting us, BP Chemicals has managed to keep all its work force in full-time employment during all these months and years of difficulty on Humberside.
I do not wish to quote the Minister too much, but I listened carefully to him. He told us that BP Chemicals holds a major position in the European production of acetic acid. I believe he said that the new plant would provide an increased output of 150,000 tonnes per annum, and that the total production would be about 350,000 tonnes. Estimates have to be finalised, and so I cannot speak about them, not being an accountant, but am I correct in saying that investment could be about £50 million? If so, that is not chicken-feed by any standards.
Not a word has been spoken about this, but I am also informed that there are possible objections by the environmental lobby. I am told, however, that there is no significant danger of pollution, or of any hazards to the local community. I understand that the project is to be passed by whoever may be the powers that be—perhaps the Health and Safety Executive—but I hope that the Minister will confirm that there have been no comments in this field.
In the next year or two there will be about 700 additional jobs in the locality, in the building industry. That is not to be sneezed at, because we are not building as many houses as we should. There is no doubt that there is unemployment in that industry. Therefore, this project, with all the spin-offs, is more than welcome to the people of Hull and elsewhere.
When will the new plant be commissioned? Was it 1979? We shall have to wait. I believe that some hon. Members opposite said that it would be 1980. I am not sure of the date, but we are willing to wait when we see something positive on the skyline—something that is not pie in the sky, about which we are told so much.
I know that we have to apply for outline planning permission, but, with all its "ifs" and "buts", we hope that this is on the way, and we welcome it with all our hearts.

11.37 p.m.

Mr. David Crouch: The House will recognise the sincerity with which the hon. Member for Kingston upon Hull, West (Mr. Johnson) spoke—as he always speaks—on behalf of his constituents. I know that his constituents have suffered a great deal of disturbance and distress, and high unemployment, in the fishing industry and other industries. The hon. Member dealt with the facts. It is his duty to represent his constituents. I see that the two other hon. Members for the Hull constituencies are present, being similarly interested in proposals that affect their constituents. But we are all interested in our constituents, and we are interested in the constituents that we represent in totality—the people of the whole of Great Britain.
I speak as one who is much concerned with unemployment and who is involved in the chemical industry. I declare an interest. I remember sitting here in 1972, one Friday afternoon and into the night, supporting the then Government against my colleagues, who at the time were against the passing of the 1972 Act, Section 8 of which was subsequently amended to increase the amount of help that can be given to industry under the 1975 Act.
I was in favour of the House being able to provide help to industry both in development areas and in those areas in which industry needed help—wherever those areas were—to enable it to succeed and to produce more wealth for this country. Having paid my respects to those hon. Members who represent constituencies in Kingston upon Hull, and recognising their particular interest in the matter, I can, however, tell the Minister that to ask for the provision of £10 million or a little more to provide 140 jobs is to ask the House to swallow an awful lot. That applies particularly when we talk about BP—a partly nationalised industry—when we talk of the most successful industry in Britain, bar none, and when we say that we must give an interest-relief grant of 20 per cent. to the company.
Perhaps I am wrong even to suggest opposition to this proposal, but I utter a word of caution, because I am concerned about Government expenditure. What about Government expenditure on education, on health, on roads, and on other matters? 
Here we are discussing Government expenditure of £10 million for 140 jobs, and late at night when there are few hon. Members here to consider the weight of this sort of decision. A couple of weeks ago, when I was abroad, there was a great debate about Government expenditure which exercised the minds of hon. Members on all sides of the House. Tonight, we are calmly proceeding in the same old way, on behalf of all our constituents, talking about £10 million to provide 140 jobs.

Mr. James Johnson: It is not just a matter of simple arithmetic about X jobs for £Y million. We are turning out acetic acid by the million gallons, and that will be exported. Surely there is more to this than just a matter of so much money for so many bodies going to a site.

Mr. Crouch: I accept that. We are thinking of the national output of wealth and the production of acetic acid from one of the biggest production plants in the country. I know the plant on the estuary in the hon. Gentleman's constituency. It is very big. But why do we have to vote the taxpayers' money to achieve this? I do not understand it. This is not the industry that I knew. I was in ICI, as the House knows. Is ICI to be the next to come cap in hand to this House saying "We, too, want to invest £50 million, but may we have £10 million from the Government first?"
I cannot understand why BP is doing this. I have great respect for BP, and I know many people in it, including people on the shop floor. But I am surprised that this rich and great industry, which prides itself that it can compete with the world, is coming cap in hand to the Government saying "Give us £10 million".
The answer, of course, is that the company is thinking "We see a way through. The door is swinging. The two Industry Acts allow the door to swing. Let us make use of them". People in industry today are not fools. Certainly the people in the chemical industry are not. They are spotting their opportunity. Perhaps it is up to us to latch the door occasionally and to say that we need that £10 million for overseas aid, for another hospital, for education, for the social services, to help the disabled, for a new mental hospital,


or for some of the other great expenditure in that area.
I do not want to overlay the point, but I speak as one who comes from industry and who is concerned that we in this House should be careful not to be railroaded into thinking in terms of more money for industry simply because industry wants more money.
Why cannot the industry channel more money? BP is not an unsuccessful company. I cannot imagine that BP is unable to find £50 million for its investment if it wants to. Last week the Chemical Industry Association announced an investment programme of £2,008 million over the next three years in Britain. That is about £700 million a year for the next three years. That is not a bad prospect for a flourishing industry. Yet, in the midst of it, we have one of our great chemical companies coming to the House because it sees the door swinging. It sees a loophole.

Dr. Jeremy Bray: The hon. Gentleman seems to have misunderstood the intention of the scheme completely. The justification for this investment finance in the scheme is that the investment costs the country at least 20 per cent. less if it is made during a recession than if it is made at the peak of an investment boom. That is why it is a good bargain for the nation.

Mr. Crouch: I always listen to the hon. Member on these matters. He has great experience and knowledge. But his observation was too clever by half. He is talking about taxpayers' money, not the money raised by a capitalist company. I should like to see the money coming from the profits of the company. He is saying that it will help the company because we are living in a period of 25 per cent. a year inflation which was generated by this Government, and, therefore, we should extract the money from the taxpayer. It is a false argument and I do not follow it.
I do not take exception but I express my concern that late at night the House is being asked to vote another £10 million, to an industry which is not in terrible distress. I argued in favour of keeping British Leyland going when many of my hon. Friends said that it was

a lame duck and should not be propped up.
There is an argument for reinforcing success. Let BP reinforce its own success. I am sure that it does not need this extra £10 million, but it has found a way of getting it out of a benevolent Governement.

Mr. Dennis Skinner: Is the hon. Member for Canterbury (Mr. Crouch) not aware that over the last 20 years successive Governments have found it necessary, as a result of falling profits, to cosset the private sector by handouts and persuade them to invest in difficult areas in order to provide jobs? That is one of the problems with which the private sector will have to grapple to a greater extent than before. The system to which the hon. Gentleman wants to hark back is now no longer one which can be sustained. The answer is to adopt a Socialist approach, but in the meantime we shall continue to do this to prop up the system and provide jobs. The alternative is the one that we have proposed for many years.

Mr. Crouch: I knew that the hon. Member for Bolsover (Mr. Skinner), in his sweet and reasonable way, would turn my argument round. I cannot accept what he has said. He may think that he wants to see this happen to a greater extent, but then there would be no door at all. The door is restricted by the two Industry Acts. The Government have to ask the House for permission to give this money because it is excess of the amount laid down.
The Minister has not sufficiently justified the case for asking for £10 million for BP to extend the plant, notwithstanding the need, which I recognise, for the creation of jobs in an area of high unemployment.
The chemical industry is capital intensive, not labour intensive. The argument is to create the size of industry to produce acetic acid on a world scale in competition with any other country. The company says it cannot do that on its own. Let the House be warned. If the door is allowed to swing open too far every company in the country will try to go through the gap to obtain contributions from the taxpayer and the Treasury coffers. If so, there will be no hope of


our achieving stability again and increasing our gross domestic product. Instead, there will be an increase in our gross taxation.

11.50 p.m.

Mr. Kevin McNamara: I listened with interest and some alarm to the hon. Member for Canterbury (Mr. Crouch), who missed the boat on two counts, as also perhaps did his hon. Friend the Member for Bridgwater (Mr. King).
First, it is not as though only 140 jobs will be created by the scheme. The industry is highly capital intensive, and production of the plant will involve many concerns throughout the country. It will mean a considerable amount of work in chemical engineering areas which have been suffering from unemployment.
Secondly, the hon. Gentleman should not talk as though BP were the only company receiving selective assistance. Every major chemical company, including ICI, has already received such assistance for many of its capital projects under the regional planning strategy, and has also had the advantage of the regional employment premium, which Humberside does not have. But I have not heard hon. Members say that companies in the depressed regions, as Humberside now is, should be prevented from having that type of assistance. The hon. Member for Canterbury made a niggling criticism which I had not expected from him.
The plant in question will be situated not in any part of the city of Hull or in the constituencies of Kingston upon Hull, Central, West or East, but in the constituency of Bridlington. It is interesting that there is no Tory Member for the old East Riding present to support this important capital investment on the north bank, investment that the area desperately needs. It will mean 700 jobs in construction alone, a number that will increase as the project gets under way towards the end of the year and the beginning of next year, subject to planning permission. It will make an appreciable hole in male unemployment in the Hull travel-to-work area of over 11,000 and in Humberside generally of over 18,000. That is immediate positive help within our area, quite apart from the spin-off outside the area of which I spoke earlier.
I understand that of the 140 permanent fresh jobs at least half will be for craftsmen. It will be work of a high technological character. That is important in an area lacking in skilled opportunities. In anticipation of the programme the company has already taken apprentices into employment. It has also prepared its work and training schedules for the semiskilled operatives who will be involved.
It is regrettable that, the situation in 1974 being such that BP could not then go ahead with its plan, only now is it able to take advantage of this section of the Industry Act. This help is being given under the same provision as help was given to British Leyland, Chrysler and Alfred Herbert. The operation of the Act on a wider scale also shows an important development in regional policy.
If, as I hope it is not, it is the Government's intention to be adamant against the creation of new development or special development areas, this provision of the Act enables them to give assistance to areas of an intermediate nature, or perhaps not even that, where there are very high pockets of unemployment and need in this time of tremendous difficulty for our constituents and their families. It is at least an opportunity for the Government to give some boost to the economy of Humberside. If we are to have a more flexible development of regional policy in this way, it is to be welcomed.

Mr. Crouch: Section 8 of the 1972 Act does not apply to regional development. It is concerned with the development of industry with regard to national importance. It does not concern help to a region. I am sure that the hon. Gentleman realises that.

Mr. McNamara: I assure the hon. Gentleman that 700 jobs in the construction industry and 140 permanent jobs, as well as the spin-off in other sectors responsible for capital plant, constitute regional assistance, whether general on a national scale for national industry or whether for a local industry. This accelerated project scheme is in an area of Very high unemployment with very little capital-intensive industry and very little skilled technology, and it is to be welcomed.
But this boost, along with the M62 and the Ml8 and the Humber Bridge, when it comes, welcome as they are, is not


sufficient for the needs of our region. We need far more positive help from the Government to bring the level of permanent unemployment on Humberside down considerably. We need much more effort by the Government; we need to get development area status; we need to have industry steered and directed to our area if we are to tackle its core of unemployment, which has been worsened by the decline of traditional industries.
This one project must not be seen as an enormous boost to the area. A lot more has to be done; a lot more capital has to be invested in the area if we are to get rid of our core of unemployment on Humberside.

11.59 p.m.

Mr. Michael Grylls: The hon. Member for Kingston upon Hull, Central (Mr. McNamara) has made an excellent speech on behalf of his constituents, and we on the Opposition side fully understand his feelings. A few weeks ago, in a Friday debate on regional policy, Labour Members were complaining about the terrible levels of unemployment in their constituencies. But it is Government policy which has led to rampant inflation, a lack of investment and high unemployment. How can the Government's supporters complain, therefore, about the situation in the regions?
There is an Alice-in-Wonderland situation in our economic and industrial affairs. This measure is a condemnation of the Government's whole policy. We do not intend to vote against the motion because we are as concerned as anyone about the level of unemployment. The proposal is being implemented basically under the 1972 Act, which has been of assistance to companies.
It is an extraordinary situation when BP, until recently 50 per cent. State-owned, and internationally respected as one of the giants of business, should have to ask the Government for a contribution of £10 million to an investment project of £50 million. That never happened with companies the size of BP under the Conservative Government. Other companies will now probably be queueing up for help. I appeal to the Government to get their industrial and economic policy right so that these companies can generate

sufficient cash flow and profits to undertake their own investment.
One of the directors of BP, Mr. Bob Fenning, who was responsible for sales and commercial services, was reported in the Financial Times last September as saying that certain investment was under review
because of the effects of inflation and the depressed economic situation.
Part of the economic troubles are worldwide, but our rate of inflation is double that of any of our competitors. Talking of BP's cash flow, Mr. Fenning said
We are suffering from a cash flow crisis bigger than any other crisis. We are not generating enough to build plants to meet the demand in the future.
That is why the motion is before us tonight.
It is convenient that we should be discussing this giant of the chemical industry tonight. It is only a few days since the report of the little NEDC on the British chemical industry was published. That report is important and should be discussed in a wider context than simply the investment covered by the motion. The little NEDC is an example of one of our happier innovations. Its report is a study produced by management, unions and Government working together in the common interest of that industry. It highlighted the No. I problem as being inflation. It did not say that it was the failure of the private enterprise system. That comes into difficulties only with a 25 per cent. rate of inflation. Not only can private companies not invest, but they cannot maintain their capital base to continue to exist. That is the problem which Labour Members must appreciate.
Inflation is the main problem which has hit investment in the chemical and other industries. The little NEDC's document clearly stated that the capital investment costs of putting up plants, such as we are discussing in Hull, have more than doubled since 1970. That is one of the reasons why the problem has been created.
The two projects with which BP is concerned relating to North Sea oil in the Forties field have cost an extra £75 million this year because of inflation. It is not getting anything new or extra for that money.
I know that other hon. Members wish to speak, so I shall end where I started.


We are not against this investment. We hope that it will create more than 140 jobs. Indeed, we hope that it will do many good things for Hull. Looking at the country as a whole, however, I suggest that the Government must get their framework right so that industry can produce proper cash flows and invest and produce not 140 jobs but 140,000 jobs. That is what we need. But that cannot be done by doling out odd sums of £10 million at midnight in the House of Commons. It can be done only by getting the Government's crazy policies in the economic sphere right. If the Minister takes that lesson home from the debate, it will be more worth while than the proposal we are discussing tonight.

12.7 a.m.

Dr. Jeremy Bray: I support both the accelerated investment scheme and this project in particular and the constituency case which has been so ably put forward by my hon. Friends and which no doubt will be put by my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) shortly.
I should like to deal with the industrial and economic question which has been mentioned by Conservative Members and to which my hon. Friend the Minister addressed himself. I could hardly do other than support this scheme. The Prime Minister, in an interview with James Margach reported in the Sunday Times last week, said:
But our biggest reforms undoubtedly have been in consultation with industry and in the whole approach of Government to industry. All moderate comment now—and this isn't confined to a single Party—stresses the need for micro-economic, sectoral intervention and planning, as opposed to the lurches of macro-economic Keynes-type financial policies".
Even the jargon is lifted directly from my book "Decision in Government", which the Prime Minister did not see fit to acknowledge in his interview with James Margach and for which he sacked me in 1969. It does not pay to be before one's time. Unfortunately, the Department of Industry does not seem to have read that book. I am not entirely sure that my hon. Friend does not need to refresh his memory of certain passages in it. We need to set such a project in the context of the Government's general industrial policy, the general state of the industry and the general economic background.
With that in mind, I should like to take up the question put by the hon. Members for Canterbury (Mr. Crouch) and Surrey, North-West (Mr. Grylls)—namely, could the need for such measures be avoided by general economic policies? I am in favour of an increase in company liquidity and even of some relief of company taxation, possibly going beyond the extension of the stock valuation relief in the Budget. We shall see.
In trying to make the case for this approach to my right hon. and hon. Friends in the Treasury, I asked Jim Ball and Terry Burns, of the London Business School, to run through the effect of a major cut in company taxes in the Budget. To produce this £50 million increase in investment by a cut in taxes on companies would require a £75 million cut in company taxes, whereas the Government have achieved this by Government policies for a mere £10 million. The reason for that enormous disproportion between £75 million in tax cuts and £10 million in grants is that if one makes a tax cut it falls on the just and the unjust, it falls on those who will invest and on those who will not, and some of it has a marginal effect in encouraging investment. But it undoubtedly pays, if one is regulating demand through cycle, to be as highly selective in one's instruments as one can. There are problems in being so.
The first question I should like to ask the Minister is whether this is an outright grant conditional on construction of the plant or a loan repayable in certain circumstances. Neither tie wording of the motion nor Section 8 of the Industry Act, amended by the 1975 Act, makes it clear. It can be in the form of assistance by loan, grant or anything else.
If, when this splendid plant is built, it is found that this additional capacity is employed profitably from the start and that the luck of world markets means that BP, as it then seems, never needed the incentive after all and would have done well if, in its own sole, uninfluenced commercial judgment, it had gone ahead, is it not reasonable that the Government should get some reimbursement of the £10 million?
My second question is this. The grant seems to be up to about 20 per cent. of the cost of the project, which covers at


least two years' interest costs, at real interest rates—and, of course, it is real interest rates and not the interest rate which includes a large allowance for inflation which matters in considering the effect of such a grant.
Considering that this project was first mooted a year ago and the size of the grant is sufficient to finance its being advanced for two years, I find it a little difficult to believe that BP needed quite as much money as that to bring the project forward.
The whole chemical industry is poised with many projects in the pipeline. There is a certain amount of stickiness in the approval of projects at the moment. People are holding back for the Budget to see the effect that it will have and how the economy develops in the next few months. But we could have a substantial increase in the chemical industry investment in the next few months. I am referring to approval of projects which will not have an effect for three or four years. This project will not be completed until 1978–79, with the peak in 1978, which could be at the peak of the boom. It seems a little late in the trade cycle to be encouraging long-lead investment of this kind. If there could be shorter lead investment, for example in engineering, this would provide many more jobs in Hull, and I take the importance of that.
What are the criteria for accepting different projects? Why this one? I understand that 50 per cent. of projects proposed are turned down. What were the reasons why some were turned down and others were not? I hope that it is not the formality of their appearing in investment programmes. Many hon. Members have seen projects put in and out of programmes. It is a purely formal process. The judgment that should be made is whether, without encouragement, the company could not be expected to go ahead in the circumstances of the time, taking into account present capacity, competitiveness and demand prospects.
The hon. Member for Bridgwater (Mr. King) was precisely wrong in saying that there should be a cast-iron commercial case. If there were such a case, BP could go ahead. The case for a grant like this must be just slightly dodgy, so that BP would not go ahead on its own commercial

judgment. Otherwise the grant would not be necessary.

Mr. Tom King: There could be a commercial case, but with one tiny snag: one may not have the money.

Dr. Bray: I accept that, but BP can borrow at the moment. When one is trying to find £45 million towards a £50 million project, it is hardly likely that £10 million will make much difference. However, I accept that it helps from the point of view of financing.
The Secretary of State for Industry is statutorily obliged to consult the Industrial Development Advisory Board. That Board should be taken seriously. If it disagrees with the Secretary of State, its advice has to be given to Parliament. I do not see why this should be done only if it disagrees with the Secretary of State. I should have thought that, as a matter of course, the Secretary of State would wish to give the Board's report to Parliament, certainly when Parliament's approval is required for a project. What specific consideration was given to this project by the Board?
Another problem arises over what consideration is given to directly competitive projects from other companies. What if ICI said "We should like one of these too"? ICI currently claims that it smooths out investment throughout the trade cycle. In a speech last year I suggested that it did not, and I promised members of the company that I would correct that false impression.
If ICI is smoothing out investment, however, it cannot make the case for getting a grant like this because it does not meet the conditions for bringing forward a project which otherwise it would not bring forward. But does that imply some sort of Buggins' turn? Does it mean that if BP gets the acetic acid plant ICI will get the next ethrylene plant and Shell Chemicals will get something else? It might be simpler, but it would be wrong if it were done on that basis. The right way to face the difficult problem of choosing which project to go for is to set it in the context of a broader industrial analysis.
What measures does the Department maintain of the pressure or demand in the chemical industry for its products—the pressure of demand among the wide-


spread customers for acetic acid, for example, the pressure of demand on its suppliers? Process plant manufacturers have an important interest in the stability of investment in chemicals.
I referred to pressure of demand, not to output. It is the difference between output and the capacity of the industry and its related industries which the Government should be watching. I am sure that they are watching it in a general sort of way. If I might answer for my hon. Friend, I am equally sure that they do not maintain any sort of running analysis of demand on industries which can provide a background for weighing projects like this against one another.
What conditions are attached to the use of United Kingdom contractors and plant suppliers for this project? I am delighted that 1,000 men will be employed during the construction of this plant, but for every 1,000 men employed on site 2,000 more will be employed off-site in engineering factories making the equipment. If they are not employed in this country, they will be employed in Germany, the United States or Italy. I should like some assurance that they will be employed in Britain.
I support the accelerated investment grant scheme generally and this project in particular, but the Minister must answer these industrial and economic questions—if not tonight, on a future occasion. Unless the Department of Industry gets its administration of this scheme sorted out and properly integrated with the making of industrial and economic policy generally, it will get into the most unholy mess and have to abandon the scheme, and we shall not then have many more examples of this imaginative kind.
The Government have taken this necessary first step. I do not blame them in the least for getting on with the job now. It would have been better if they had started the job seven years ago, but at least they are now on the right path.

12.20 a.m.

Mr. Anthony Nelson: I shall be brief, as I am aware that another hon. Member with a direct constituency interest wishes to participate in the debate.
The hon. Member for Motherwell and Wishaw (Dr. Bray) made a typically interesting contribution and critical analysis of the motion. It is a sad reflection

on this sort of debate that such an important question as whether or not the money concerned is repayable should slip out half-way through the debate. It is absolutely critical to know whether it is a grant or a loan. I am amazed that there is misunderstanding about this, and I should like a clear answer from the Minister.
The Minister said that BP Chemicals International is very hard pressed for investment funds. So indeed are my tax-paying constituents. They too are hard pressed. We have a proper right to question the viability and what right the Government have substantially to increase the amount that they are allowed to pay under Section 8 of the Industry Act for an investment such as this.
I should like to direct to the Minister a few specific questions about the accelerated investment grant scheme and, in particular, to ask whether the hon. Gentleman feels that the money is most usefully used by applying it in such large amounts to major capital projects rather than perhaps to some smaller projects. I was interested to read recently that the threshold level for consideration of such grants may be reduced below the level of £500,000. I personally would regard that as a welcome development. I rather regret that such a large tranche is now to be made available. I would question whether this is the first of many that we shall see and whether they will grow larger and larger.
There is an opportunity-cost element, as my hon. Friend the Member for Canterbury (Mr. Crouch) has mentioned. Many of us cannot understand how even the most ardent Socialist can sanction spending such large sums of money on companies which can well afford, either through reinvested profits or through borrowings, to finance such programmes, when there are industrial projects and companies which would employ many more people and projects in the social field which also have very pressing claims.
Therefore, I seek further clarification from the Minister as to the criteria that he has employed in granting this loan. I also understand that it is a grant that is substantially higher than he would otherwise have considered. There appears to have been some special factors in this case. Just what made him decide to make this money available?
Furthermore, I understand that the Monsanto process is to be used by this new chemical plant and that this will be employed under licence from the Monsanto Company. I assume that this will be an expensive licence. Just what are the arrangements with regard to paying Monsanto? How much is involved, and what proportion is that of the total capital cost? Is this included in the cost of some £55 million which has been proposed for the project?
My final comment is that, when questioning the propriety of making available massive amounts of public funds to bring forward the investment plans of industry both to ensure that industry installs capital equipment when the cost is perhaps lower than it would be in a few years' time and to ensure that productive capacity is there in a few years' time, one must question both the viability of the industries into which the money is injected and the opportunity cost. The real problem is that the incentive just does not exist under present conditions for industry to invest that money itself. The real way in which we should be encouraging industry to invest is not by the lavish ladling out of money from Whitehall, which it is now the remit of every corporate financier to seek out, but by instilling an atmosphere of confidence in industry, both by fiscal means, as the hon. Member for Motherwell and Wishaw mentioned, and by retracting some of the most damaging aspects of the present Government's legislation in the industrial field, notably nationalisation. That would give industry confidence to reinvest its own money or to draw down loan capital for investment in capital plant.
I question whether the Government have the ability to invest these funds. Would the Government have made such money available for capital investment in the synthetic fibre industry, a highly cyclical industry? I question whether this plant will make the contribution to our balance of payments in four years' time that the Minister forecast. We must proceed with caution, but our priority must be to encourage an atmosphere of confidence in which industry will invest of its own accord without Government assistance.

12.26 a.m.

Mr. John Prescott: In view of the limited time avail-

able to us, I shall deal with only one or two points. My colleagues from Hull have already emphasised the point that the unemployment figures in Hull are far higher than the general average. Our unemployment rate has increased to a far greater extent even than the rate in the development and intermediate areas. The problem is becoming so bad that we are becoming known as the "black hole" of Humberside. However, there is not the time to develop those arguments, and the case has been well made by my colleagues.
I welcome anything that is done to improve the job situation in my area. The fact that this measure will bring 700 building jobs to my area is welcome indeed, because we have a huge pool of unskilled workers in the building and construction industry. The fact that a further 150 long-term jobs will be brought into the area is also very welcome.
Having welcomed certain aspects of the scheme, I have certain doubts about the amounts of money involved. We are talking about a £50 million project and there is talk of 20 per cent. grants and sums of £66,000. If the justification behind the scheme is that it seeks to accelerate investment and to assist industry to do somthing to relieve the job situation, we must ask whether this kind of scheme is the most effective way of going about the matter.
I do not deny that what is being done is welcome, but I should like to give one or two examples of what has happened on Humberside, where, as the House knows, jobs are at a premium. Those of us who represent the area are anxious to bring in as many jobs as we can because we want to halt the decline. Certainly the number of jobs lost has been far greater than the number of jobs created. We see in the area a number of industries in decline and significantly less money available for employment projects. I do not think we have looked carefully enought at the totality of investment and development.
Let me give one or two examples. British Petroleum will bring in chemicals by freightliner, but, because of the lack of investment at the Liverpool end, those chemicals will come not by rail but by road. This will mean a further decline in the railway industry.
I also wish to point out that the firm of Imperial Typewriters in my constituency was closed down following a multinational decision. The decision which was reached was to the effect that machines would be imported rather than made in this country. If action had been taken early enough, 2,000 jobs could have been saved.
Furthermore, the shipping and shipbuilding industry has liquidity problems involving a sum of £1½ million, and this very week 1,000 men will lose their jobs. That is happening now. The fishing industry is declining and money needs to be spent on it. In that case some 10,000 jobs are involved. There are many areas in which considerable help could be given to save jobs, and I believe that money could be used to preserve jobs, if that is the purpose of the exercise.
The Department of Industry is attempting to help with jobs and grants, but then the Chancellor of the Exchequer puts VAT on luxury caravans and hits Humberside, which is the biggest producer of such caravans, particularly hard. This action loses us more jobs than can be created by a £50 million investment by the State.
These are the sort of problems which arise when one has constantly to offer more carrots to industry to invest in particular areas. This is a carrot to a huge multinational company, and we must question whether the control of its finances are all they should be when public money is being given to the firm.
I cannot say much more because of the limitation of time, but I have reservations about this measure. The Government's regional policies, which are designed to create more jobs, are becoming increasingly suspect. Far too much money is being spent to create far too few jobs. We need a fundamental change, and I hope that the change in my party's leadership might result in a rethinking.
We are bringing a delegation to see the Minister in the next couple of weeks, and I urge him to consider the question of regional employment premium payments to firms in development areas competing with firms on Humberside which, although only an intermediate area, has an unemployment rate higher than many develop-

ment areas. This is particularly affecting our shipyards. I was told by a Government Minister recently that it would cost no more than £20 million to extend REP to intermediate areas with unemployment levels as high as those in development areas. That would be a far better way of bringing help to areas like Hull. We must consider a more effective way of using public money to create jobs.

12.32 a.m.

Mr. Tom King: With the leave of the House, I should like to reinforce points which have been made from both sides.
There has been, understandably, almost a desperation in the speeches of hon. Members from the Hull area about unemployment there. Against that background, the hon. Member for Kingston upon Hull, East (Mr. Prescott) showed courage in questioning whether we are using this money in the most effective way. The Government cannot buy their way into investment on the sort of scale—£6,000 million has been mentioned—needed for this country. There is no substitute for industrial confidence and real investment by industry.
Our acceptance of this measure is only because, against the background of the Government's economic policies, it is a matter of urgency that something should be done. This is very much second best to real investment. The question of Buggins' turn will have to be looked into. I understand that the Government went to BP—not the other way round, as suggested by my hon. Friend the Member for Canterbury (Mr. Crouch)—and asked whether the company would undertake this scheme. Whom do the Government choose to approach, and what is their order of priority?

12.34 a.m.

Mr. Carmichael: With the leave of the House, I shall try to deal with some of the many questions raised in the debate. There is not much time left to me. I do not complain about that, because this is an important subject which we could, perhaps, debate more fully at another time, although the hon. Member for Canterbury (Mr. Crouch) said that he had sat for many hours in Committee and in the House dealing with the Industry Acts of 1972 and 1975.
The hon. Member for Bridgwater (Mr. King) asked for information about Section 8 schemes. This is a capital-intensive project. The scheme has been approved by the Government collectively and cleared with the EEC Commission. I confirm that no environmental pollution will be caused by the project.
My hon. Friend the Member for Motherwell and Wishaw (Dr Bray) referred to his book. We remember the circumstances in which he wrote it. What occurred was largely a matter of etiquette rather than the contents of the book. I shall bring my hon. Friend's remarks to the attention of my right hon. Friend the Prime Minister.
BP has large resources, but it also has large commitments in the North Sea and Alaska. Its net borrowing requirement for 1975–76 is over £600 million. The project has been deferred three times in the past three years. The Industrial Development Advisory Board supports the use of the accelerated investment scheme in this case. Reference was made to "Buggins' turn". There is no Buggins' turn. Each case is viewed strictly on its merits, taking into account the market, the industrial context, commercial prospects and the risks.
I was asked whether the money was repayable. The Department had the choice of making assistance available by loan with concessionary interest or by interest relief grant which compounds the assistance into grant form. A loan would be repayable, but it would cost more immediately than would an industrial grant.
My hon. Friends the Members for Kingston upon Hull, East (Mr. Prescott), Kingston upon Hull, West (Mr. Johnson) and Kingston upon Hull, Central (Mr. McNamara), while accepting the scheme, put forward a strong plea for additional effort to get jobs to the Hull area. My hon. Friends welcomed the construction jobs which would be produced by the project. The scheme involves more than the creation of jobs. It gives a great deal more security to British industry. The multiplier effect on employment in Hull will be considerable. If the House approves the motion and if everything goes well, work will be able to start before the end of September this year.
I should like to give some idea of how the accelerated investment scheme is administered, for the information not merely of the House but people outside. It is important that industry should realise that the scheme is available. The detailed criteria have been published and widely disseminated through the CBI, banks and leading accountancy firms. The first criterion is that a project should be for new investment or modernisation, or both, with a capital cost, including working capital, normally, but not invariably, exceeding £0·5 million. To go much lower than that would overload the machine, because the Department makes full investigations into whether the scheme has been deferred. Proof must be provided that the project has been genuinely deferred.
Secondly, the project should be a net addition to the firm's capital investment programme in this country—that is to say, it would not take place or it would be deferred but for the Government's assistance. Thirdly, the project should be commercially sound and lead to an improvement in the United Kingdom balance of payments. Fourthly, the project should be planned to commence before the end of September 1976, and projects which would be completed early should be given priority. Fifthly, modernisation projects must lead to significant improvements in efficiency.
The scheme is administered selectively, with each case examined on its merits. The applicant must produce the information justifying the project against these criteria, and an appraisal is then made of the investment proposed and of the company in accordance with the criteria for selective assistance, details of which have been placed in the Library of the House. Other hon. Members who are not quite as involved in this aspect of our interests may also find it helpful to check there in regard to firms in their own areas.
The most critical areas of this appraisal, apart from commercial viability, are the evidence of deferment, the foreign exchange benefits and the ability of the company to start work by the end of September. There are no standard terms for the assistance, which will vary with the circumstances of each case—the scale of the project, the ability of the company


to secure alternative finance, its effect in terms of enhanced efficiency and benefits to industry, and the balance of payments. The actual assistance offered will therefore be a matter of negotiation between the Government and the applicant. We would normally regard it as very exceptional to have a ratio of assistance provided to investment value lower than in the present case, which is particularly attractive in terms of the purposes of this scheme.
The form of the assistance can be either loans at concessionary rates of interest or the equivalent interest relief grants. No equity stake is involved. The House will appreciate that, in view of the close attention being given to public expenditure, in general we concentrate assistance in interest relief grant form, since viable companies should be able to obtain most of the finance from private sector sources.
The scheme is counter-cyclical in purpose, and to stimulate worthwhile new investment quickly it is essential to have arrangements which, while allowing a wide range of our successful companies to apply, will enable cases to be processed without undue time being wasted. The threshold for the minimum size of projects was set at £0·5 million since only companies with a sound record, of significant size and with well-developed systems of project and investment appraisal would be in the position of having deferred investment projects above this level. The viability of projects would be much more easily checked with firms like this, and the Government would be assured that they were genuinely deferred.
The hon. Member for Chichester (Mr. Nelson) asked about Monsanto. BP announced on 6th February that it had signed a licence agreement with Monsanto relating to the process for the manufacture of acetic acid which will be used in the plant. The arrangements between the two firms are a matter of commercial negotiation, and they have been taken into account in estimating the benefits from the project.

It being one and a half hours after the commencement of proceedings on the motion, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted business).

Question agreed to.

Resolved,
That this House authorises the Secretary of State to pay, or undertake to pay, by way of financial assistance under section 8 of the Industry Act 1972, as amended by section 22 of, and Part I of Schedule 4 to, the Industry Act 1975, in respect of the construction of an acetic acid plant at Hull by BP Chemicals International Limited sums exceeding £5,000,000 but not exceeding £10,140,000.

LICENSING (SCOTLAND) BILL

Order for Second Reading read.

Ordered,
That the Licensing (Scotland) Bill be referred to the Scottish Grand Committee.—[Mr. Harper.]

ADJOURNMENT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Harper.]

EMPLOYMENT (NORTH-WEST REGION)

12.44 a.m.

Mr. Paul B. Rose: I am delighted that my hon. Friend the Under-Secretary of State for Employment will be answering this debate, as we worked so well together on the Industrial Relations Bill when facing the Conservatives at that time. My hon. Friend will forgive me if I raise what at first sight may be regarded as a constituency matter, but it epitomises the problem faced in the North-West and affects about a dozen constituencies in the area.
On Saturday, at my advice bureau I received a deputation of workers from ICI, whose works in Blackley will be closed in four years. Already 165 jobs have been lost and 620 more workers will be affected by 1980. This decision is described as unalterable. In almost all cases, manufacturing operations in the works will cease by 1980, and the result will be that on the north-east side of Manchester there will be little industry at all. Indeed, earlier this year I saw a similar deputation from what is locally known as Connolly's, which relies largely on telecommunications products and on Post Office contracts. Already one-third of its work force has been made redundant. Since then we have had some


better news. Indeed, the placing of Government contracts is one of the vital parts of an integrated strategy for the North-West and for the North as a whole, because with the new M62 motorway and the east-west road, together with the railway, we must consider this in terms of one large regional problem.
As for ICI, I hope that my hon. Friend will speak to his right hon. Friend the Secretary of State for the Environment concerning the pretext which has been given that the new plant in Blackley cannot be built because of environmental difficulty. One wonders why it is not possible to put other chemical products into production—paints, foam and plastics—or, indeed, any non-toxic chemicals, remembering that this is at a time when the chemical industry plans to spend £2,800 million over the next three years in building new plant in Britain. It is in that context that one looks at the situation in the area.
This is all symptomatic of the position in the North-West, the cradle of the Industrial Revolution, which I trust my hon. Friend and the Government will never allow to become also its grave. The problem of the North-West is that it has not had the lobby that areas such as the North-East and Scotland have had, and the situation has deteriorated imperceptibly. If one looks at yesterday's unemployment figures, which, in general terms, are encouraging, one sees that none the less the North-West still has 6·4 per cent. of its employees unemployed—a figure, seasonally adjusted, of 177,600. One can compare that with the figure for Scotland, about which one hears a great deal of outcry, notwithstanding the far better prospects that Scotland has because of North Sea oil. The figure for Scotland is 6·3 per cent. Perhaps a more significant comparison is with the South-East of England, where the prosperous area of the metropolis has a figure of 3·8 per cent. That means that the North-West is almost twice as badly off as the South-East.
If we consider the vacancies, we find that the position is even worse. For the North-West the number of vacancies, again seasonally adjusted, is 10,800 and for Scotland it is 14,200. The position is a little brighter than I would have been able to refer to had I been speaking only two days ago on the figures for mid-

February. That is perhaps a tribute to the strategy of my right hon. Friend the Secretary of State for Employment and other members of the Government. Money has been injected into the economy on two separate occasions—money which, I hope, will be added to in the near future.
The North-West faces a particular problem, for a number of reasons. It has been permitted to slide unnoticed into this inferior position. But the general level of prosperity in the North-West reveals a rather unusual feature. If we look at Social Trends, the rate of consumption can be seen to be still relatively high. What we discover—and it is essential to isolate these areas—is that there are pockets of poverty and neglect in the North-West, and, therefore, it is in these areas that we must look for Government assistance.
Those pockets seem to be spreading, and I want to know what the Government are doing, for example, to give the sort of incentives to a firm like ICI—an enlightened firm which provides employment in my constituency—to remain in an area like Manchester rather than moving to, say, a development area.
We need an urgent review of regional policy in order to create new job opportunities and even more, in the North-West, to safeguard existing jobs, many of which are imminently threatened. In their strategy the Government may offer some rather icy calculations with regard to the cuts in expenditure and the theory behind their policies. They have to be modified to a degree by very important human considerations.
Looking at a map of the North-West and taking Cumbria, the coastal strip—the Fylde coast—Merseyside, and even those meccas of Rugby League like Whitehaven, Workington, St. Helens, Widnes and Wigan, together with North-East Lancashire, we see the reflection of the decline of industries such as cotton and coal and these are perhaps the worst-hit areas. But this is spreading, and I see no reason why the development status of Merseyside has not been enough to protect Liverpool other than that further action is necessary and that the Government must look closely at the steady decline of the North-West, with all the skills and potentialities that are available there.
Why, for example, would it not be a good idea for the future headquarters of the nationalised aviation and shipbuilding industries to be placed respectively in Manchester, which is a great centre of aviation, with Hawker Siddeley, and shipbuilding in Liverpool? That—or, at least, one or other of them—would be an example of direct action that the Government could take.
Clearly there are parts of Lancashire which have borne the brunt of the competition from cheap imports. To take a comparison, although it is always invidious to do so, Scotland receives a much higher level of Government assistance under the Industry Act 1972 notwithstanding Scotland's better prospects and the figures that I have given for job vacancies.
I ask the Minister to consider a special stimulus for the North-West—indeed, for the North of England as a whole, because we must not minimise the position in the North-East. We do not want to be two nations, the North and the South.
There is no doubt that the first package of my right hon. Friend the Chancellor of the Exchequer allocated a fair amount to the North-West with 32·7 per cent. of jobs safeguarded by the temporary employment subsidy, 21·5 per cent. of jobs created by the school-leaver recruitment subsidy and 14·4 per cent. of jobs made available under the job creation programme. But is it satisfactory to employ people virtually to dig holes and fill them up again when there are other possibilities?
I rember an Adjournment debate that I had in the early hours of the morning on the HS146 project, the airbus. It seems to me that, even if it were not commercially profitable, it would be more profitable in terms of the balance of payments to keep the airframe industry going and to help employment in the North-West especially if we proceeded with a project like that, rather than employ people on jobs created specially to cut down unemployment. It makes little economic sense to pay people quite large amounts in social security instead of having them at work creating the wealth of the nation.
In the North-West, the footwear, clothing, television tube, telecommunications

and construction industries need special help. Carefully-imposed selective import controls on cheap Asian products—television tubes come immediately to mind—are justified. I have never before believed that they were desirable, but we are in a crisis situation. Almost one-quarter of those employed in the clothing and textile industries are in the North-West Region. We should look at the Thorn Electrical situation at Skelmersdale, the television tube plant at St. Helens which has been closed, and Mullard's. All these companies have been badly hit and are important industries on which whole communities depend. I would welcome the placing of orders by the Government and a purchasing policy which would have a direct impact on the region. I would also welcome aid for building and construction within the National Health Service and a major sum for Operation Eyesore, which has been terminated.
One of the area's difficulties is industrial obsolescence. That sort of environment will not attract bright young executives. It is necessary to provide the sort of environment and infrastructure upon which industry depends.
I appeal to the Minister for an allocation of offices to the North-West. I am fairly satisfied with the number of advance factories, but they will be underused unless there are incentives to fill them.
Over 12 years the region gained only 4,200 dispersed Civil Service posts and 850 new ones. I am delighted that the Equal Opportunities Commission has been set up and that 400 people will be employed by it in the area. That, however, is a drop in the ocean. Much more is needed to tackle the problem. More apprenticeships are needed from employers and the industrial training boards.
My hon. Friend the Under-Secretary of State has announced the creation of new skillcentres in the Middleton and Prestwich constituency, Rochdale and Preston as a result of the Training Services Agency review. I welcome that, but it is only one item among many which we need. There are signs that the Government are responding to the needs of the area, and I hope that this debate will assist in bringing on faster recognition of those needs.
I believed that regional policy was one of the good reasons for this country joining the EEC, but it is ludicrous that out of £38·8 million spent on projects and decided not in Brussels but in this country only £3 million has gone to the North-West. That is less than half the average, leaving aside the special needs of the North-West. The EEC Regional Fund should be channelled westwards, away from the prosperous heartland of the Community.
My hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) would also like to take part in the debate. We must look at the problem as a whole with an integrated strategy. I hope that my hon. Friend the Minister will be able to give an ear also to the special problems only 30-odd miles away from Manchester, with a view to developing the North-West as a great centre.
The North-West has a great airport, a canal and all the facilities for shipping. It has great skills, and it has a great history in industry. It could also have a good future in tourism. Where better than Manchester from which to see the beauties of North Wales, the Trough of Bowland or the Lake District, or to take a trip to Stratford-on-Avon or even to London for a few days? Apart from Wales, the North-West is the area most neglected by foreign tourists.
I ask my hon. Friend to look into these matters with a view to injecting new life and prosperity into the very area upon which Britain's prosperity was founded.

1.2 a.m.

Mr. Eric Ogden: Adjournment debates are usually matters between one hon. Member and one Minister, so I am grateful to my hon. Friends the Under-Secretary and the Member for Manchester, Blackley (Mr. Rose) for allowing me a minute each of their time to make a few comments. I should be less than grateful if I did not say that it seems an excellent example of co-operation between Minister, Manchester and Merseyside, which is what this short debate is about.
First, I wish to emphasise that Merseyside and the North-West have always seemed to be among the first areas to be hit by a recession and the last to recover when prosperity comes to the rest of the

country. For many reasons we ask that the North-West should have a special call on a Labour Government.
Secondly, I ask my hon. Friend the Minister to bear in mind not only that the North-West has special problems but that special skills are available in it which are not available in the rest of the country. It has opportunities for investment and expansion and it has a mobile work force skilled in electrical, industrial, commercial and other activities.
I urge my hon. Friend to have a proper regard for the interdependence of not only Manchester, North Wales and South Lancashire but the whole of the northern industrial area. We have long passed the time when the problems of the North-West could be settled in the North-West alone. We must look at the axis of the M62 and at the north of our trans-Pennine ridge, from Merseyside, Lancashire and Yorkshire through to Humberside and the North-East Coast. We have common problems that can be solved, with Government help and support, if we look at the problems and opportunities of the area in a northern context. I ask my hon. Friend to use all his power and influence to help the efforts being made by the industrial development associations and local authorities to look at the problems as a northern region.
I thank both my hon. Friends again for the opportunity to take part in the debate.

1.4 a.m.

The Under-Secretary of State for Employment (Mr. John Fraser): There is precious little time left for me to reply. Perhaps I may begin by telling my hon. Friend the Member for Manchester, Blackley (Mr. Rose) that, as somebody who has lived in Cumberland, whose wife is from Salford and who spent his last holiday on the Leeds to Liverpool canal, I have a knowledge of the area and have considerable sympathy with those experiencing the problems not just of Lancashire but of the whole North-West.
I cannot answer my hon. Friend's detailed comments about ICI dyestuffs, which are mainly a matter for the Department of Industry, but I shall make sure that his remarks are drawn to the attention of that Department.
My hon. Friend also raised the question of the HS146 aircraft. The Government


are financing a considerable amount of work at HSA Hatfield to maintain a sufficient tempo of effort so that it is feasible fully to relaunch the project if and when that seems to be justified. The Organising Committee for British Aerospace, and later the Board, will give high priority to that question.
I fully accept that unemployment in the North-West is unacceptably high. Moreover, it is bound up with a number of special regional situations—some areas are cut off, like parts of Cumberland, for example. The regional unemployment figures mask considerable variations within the area. The Government recognise, for example, that Merseyside in particular has an extremely serious unemployment problem, and we are fully committed to bringing down the present unacceptably high level of unemployment.
Although unemployment in the North-West has increased proportionately less than in the country as a whole, this is in part a reflection of the fact that even a year ago unemployment in the region was extremely high. I accept, therefore, that a great deal more needs to be done, not only to bring down unemployment in the short term but also over the longer term to reduce regional disparities.
My hon. Friend welcomed the reduction in the unemployment figures announced this week. It does not amount to a great deal in the North-West, but it is good to see a turn in the tide. But we have not turned the tide completely. We still have a long way to go, and my right hon. Friend the Secretary of State for Employment was right to point out the real hardships for those who become unemployed through no fault of their own and that we must not be complacent about the recent welcome but very modest change in the figures.
A great deal of concern has been expressed about unemployment in terms of prospects for young people—rightly so, because they have their vision blunted most by the effect of unemployment. The Government share this concern because it is important to a person's self-esteem to be able to get a job quickly on leaving school or college, and we know how demoralising prolonged unemployment can be. This is why the recent Government measures were deliberately angled to help young people.
Those measures do not solve the basic long term problem of unemployment, but it was right in things like the job creation programme to do what we could to mitigate the worst effects and to ensure that when the upturn in world trade comes the country is well placed to benefit.
The North-West has had a considerable benefit from those measures. In the job creation scheme up to 12th March, 177 projects had been approved in the North-West, providing 2,318 jobs at a cost of £3·21 million. I must reject my hon. Friends suggestion that this is simply a matter of digging holes and filling them in. The programme is much more helpful, constructive and satisfying than that. There is no reason why the sort of Operation Eyesore projects he mentioned should not be undertaken under the programme.
Under the temporary employment subsidy scheme, up to 19th March 91 applications had been approved, saving 8,533 jobs in the North-West at a total cost of £4·09 million. The recruitment subsidy for school leavers up to the end of February resulted in 5,749 applications being approved.
We expanded the Community Industry Scheme, and the region now has 500 places spread between Liverpool, Knowsley, Manchester and St. Helens. I accept, however, that in relation to the total number of unemployed in the North-West the numbers helped under these schemes have risen relatively small, but they have brought some relief to the area and have proved of particular benefit to young people.
In August last year over 26,000 young people were unemployed in the region, and the present figure is 3,714. That fall gives some idea of the success of young people concerned in finding employment and of the considerable impact of the Government's measures.
Again, a measure not aimed exclusively at young people but also looking at our future prospects was the increase of £70 million to strengthen and accelerate the training programmes, both to alleviate the effects of high unemployment by increasing training opportunities for individuals and to help industry safeguard the long-term supply of skilled manpower. In all, over 40,000


people will benefit from these measures, many of them young people.
On 12th February this year, as part of a set of measures designed to reduce unemployment, the Government allocated a further £55 million for special training in industry. It is hoped that this will produce an extra 30,000 to 35,000 training places in industry in 1976–77. The combined effect of both sets of measures will be to provide between 60,000 and 65,000 extra training places within industry and to increase the target of the number of people to be trained under the Training Opportunities Scheme in 1976 by over 12,000. In addition, training allowances have been increased.
The North-West is likely to benefit substantially from the measures to support training in industry. It is not possible at this stage to give precise figures of the allocation of grants and awards to particular regions. However, it was recently estimated that over 1,700 awards or grants have so far been made in the region.
Under the Training Opportunities Scheme, a total of 10,661 trainees were trained in the North-West Region Training Services Agency in 1975. The target for 1976 for the North-West is 12,700. A substantial proportion of this training is carried out in skillcentres. The North-West already has a more than proportional share of skillcentre places in relation to its population compared with Great Britain generally. There are eight skillcentres and two annexes in the region. A further two at Rochdale and Preston are expected to be operational in late 1976 or early in 1977.
The recent measures to stimulate training should not only benefit the North-West in the short term but should help to ensure that the region has the requisite skilled men and women available when the upturn comes.
Perhaps I may turn to the problems of particular industries and to those measures which the Government have taken to help them. The region should also benefit from the recently announced schemes for the modernisation of particular industries and for selective

assistance to encourage companies to bring forward deferred capital projects.
The recent measures to help the construction industry should also be of benefit to the region. Of the £24 million allocated to the English regions on 24th September, just over £6 million is going to the North-West. The region is also to receive £8 million of the £50 million allocated to improvements on public sector housing.
The Government have, of course, recently introduced further restraints on imports of textiles, clothing and footwear. In addition, the Government are providing £20 million to the clothing industry to raise productivity through modernisation and re-equipment.
The Government have undertaken schemes of Stockbuilding. The National Enterprise Board is already discussing with the machine-tool industry ways of providing for the finance for the stockpiling of machine tools of types which are expected to be needed during the recovery. In regional development grants, £40·7 million was paid out in 1974–75 and £22 million in the first half of 1975–76 towards the cost of investment in industrial machinery and buildings.
Twenty-seven million pounds was paid in 1974–75 on the regional employment premium. Payments this year are expected to be around £40 million. There has been assistance under Section 7 of the 1972 Industry Act. Thirty-nine advance factories have been allocated to the North-West in the six programmes announced in July 1974. In addition, the Department of Industry has received authority to purchase land against future advance factory requirements in Tame-side, Oldham, Rochdale, Colne and Bury/Heywood.
The dispersal of Civil Service posts to the regions is, of course, an essential component of regional policy. Between 1963 and October 1975, 4,200 existing Civil Service posts were dispersed from London to the North-West Region and 850 new posts were created. In fact, the has done best of all the English regions. Current plans provide for the dispersal of about 4,500 more posts and some 600 new posts are also to be set up in the region. In addition,


the headquarters of the Equal Opportunities Commission has been established in Manchester and will be employing some 400 staff by 1978.

The Question having been proposed after Ten o'clock on Wednesday evening,

and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at fourteen minutes past One o'clock.